Powered by MOMENTUM MEDIA
the adviser logo
Lender

OnDeck launches new credit scoring model

by Reporter4 minute read
OnDeck launches new credit scoring model

The online SME lender has launched a new risk-predicting credit model which it said would support more tailored risk assessment for SME lending.

OnDeck has launched the KOALA Score (formerly the Key Online Australian Lending Algorithm), which it said was developed in-house by its team of data scientists.

The credit model would give OnDeck the ability to analyse personal credit scores of business owners, and would benefit newer enterprises, sole traders and partnerships that may not have the substantial volume of commercial data required by traditional lenders, OnDeck said.

The model uses big data, predictive analytics and statistical techniques, in combination with data from multiple credit reporting agencies including illion and Equifax, to provide tailored risk assessment for SME lending, OnDeck said.

Advertisement
Advertisement

According to the lender, in pilot trials of the KOALA risk model conducted during the first quarter of 2021, it recorded an 11 per cent increase in approvals for business loans up to $250,000 without taking on any additional risk.

OnDeck also reported that in March 2021, 15 per cent of customers received loan offers that extended the option of spreading the repayments over longer terms if required without increasing risk exposure for the client.

Commenting on the new risk model, OnDeck Australia CEO Cameron Poolman said: “Previously our credit scoring was very commercially driven, but KOALA uses a mix of commercial and consumer credit history plus cash flow to build a more holistic risk profile.

“Moreover, the KOALA risk assessment model has been tailored to the Australian small-business customer, giving SMEs more access to funding they need, coupled with an uptick in lending limits.”

Mr Poolman added that the model is suited for newer businesses that do not have extensive trading data to draw on, adding that it could present with “increased finance opportunities”.

Mr Poolman noted, “KOALA supports lending to fledgling enterprises and allows OnDeck to deliver even more opportunities for business finance – and on better terms.”

[Related: ‘Brokers the go-to’ for SMEs this summer: OnDeck]

money jar

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Stephen Hale ta

MFAA launches near-prime, specialist loan resource

Coined Finance for when your customer doesn’t fit the mould: A broker’s guide to near-prime and...

READ MORE
Daniel Newell Gedda

Specialist lender LoanU rebrands to Gedda

The personal and auto loan provider LoanU, which specialises in helping Australians with impaired credit histories...

READ MORE
tech tools

CBA introduces AI technology to combat scams

New figures released by the competition watchdog this week have revealed that Australians lost more than $2 billion...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more