How do we manage risk at liwwa?

liwwa provides investors with the opportunity to diversify their portfolio, realize high returns and support local small and medium enterprises in the MENA region. Given the intermediary role liwwa plays between investors and borrowers, risk management is inherently critical as we aim to create maximum value for investors, clients and communities. liwwa also takes a balance sheet stake in the loans hosted in its marketplace joined by banks and other financial institutions.

The ability to mitigate risk is a core competency for liwwa. To achieve this, our culture embeds risk mitigation in our daily conduct. We strive to ensure that the loans disbursed through liwwa’s platform provide an appropriate balance of return for the risks assumed by investors. Our risk management framework is based on three core mechanisms:

1. Advanced risk assessment using proprietary technology

liwwa’s credit assessment team includes experts with experience from some of the top financial institutions in the MENA region. The team utilizes various data points, machine learning technology, and their understanding of business lending to assess each application. By the end of the credit assessment, each loan application is given a credit score, which is based on the following inputs: borrower business experience, quality of the business, and financial performance.

2. Diversification

New funding campaigns are hosted on liwwa’s platform every two weeks. These campaigns are for a mix of businesses, from different sectors, and with different credit profiles. This variety provides liwwa’s investors with the flexibility to invest in different campaigns based on their risk appetite.

3. Recovery and collection

liwwa’s collection and recovery team works systematically to recover any late payments or bad debt. liwwa works with defaulting borrowers to get their payments back on track and to restructure their loans, if necessary. For any missed payment that is not resolved within a period of 60 days from the payment due date, liwwa takes the necessary legal action through an experienced legal team that handles all legal proceedings on behalf of the company.