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liwwa's Credit Assessment Process

Credit Assessment Process

At liwwa, we focus on developing the most sophisticated tools for credit assessment and financial reporting. Our in-house credit model relies on a diverse set of inputs to arrive at one discrete output, the credit grade.

We employ a credit scoring system to provide users - both borrowers and lenders - with a clearer understanding of the assessment process. Doing so also allows us to deliver more fully on two of our core values: Transparency and Fairness.

As part of our assessment process the Credit Team first checks whether the applicant meets the minimum requirements to be considered for a liwwa loan, such as having a Certificate of Registration and Trade License and being in operation for more than a year.

Since small businesses often lack prepared financials, Credit Officers use bank statements and in-person assessments as proxies. Then, Credit Officers weigh and analyze the data collected to generate a credit report and credit grade, based on which the Credit Committee makes its decision on approving or rejecting a loan.

The credit grade is the outcome of our proprietary survival risk assessment model which uses advanced analytics combining historical data and industry expertise while factoring in three dimensions: the borrower’s profile, the business profile, and the business’ financial position.

Loans are assigned credit scores ranging from 0 to 10 which are translated into risk level grades from A (lowest risk) to D (highest risk). This range provides Investors with more granular ratings allowing for more refined choices among risk levels.

What is liwwa’s risk grading system?

liwwa’s credit grading system is an alphabetic grading that assigns each loan a letter score ranging from A to D corresponding to the expected level of risk:

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How is it calculated?

liwwa’s credit grading system is based on a survival model, more precisely a Cox Proportional Hazard Model. The model estimates the survival probability of the loan, using the available data on three dimensions: the borrower’s profile, the business’ profile, and the business’ financial position. The model estimates the survival probability of the loan, using the dimension’s available data at each stage of the repayment schedule, to ultimately assign it a credit score which is translated into risk level grades (A to D).

The following visual illustrates the credit assessment process:

main.jpeg Important Note

The liwwa risk grading rating is not a measure of the quality of the investment and is not meant to replace individual due diligence. The information provided on any loan should not be interpreted as a warranty, or a promise of future performance. Further, historical data used to refine risk ratings is not necessarily indicative of future performance. Ratings are for informational purposes only. Ratings are not individualized for any specific investor’s financial situation and should not be considered investment advice. Furthermore, these ratings are not intended to be predictions of how any particular investment will perform. Each investor should carefully consider investments in any loan and be comfortable with his/her understanding of the investment.

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Give us a Call

For Borrowers: +962 79 870 4070

For Investors: +962 79 858 2253

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257 Prince Mohammed Street,

Mezzanine Floor, Office #2, 3rd Circle

Amman, Jordan

* The historical return range is based on the annualized Internal Rate of Return (IRR) of liwwa investors' actual portfolios, taking into account late payments, defaults, write-offs, recoveries and service fees for all loans originated since 2013. The range represents the 15th to 85th percentile of returns for investors whose accounts have been open for at least 12 months. Individual results may vary. Historical performance is no guarantee of future returns, and the historical return range is not intended as investment advice or as a guarantee of the performance of investment opportunities.

Important Note: liwwa, Inc. does not guarantee investors a return and all investments carry risk, learn more about the investment risks. All transactions enabled through liwwa.com are subject to Terms of Service and the Investor Agreement.

All rights reserved. Copyright © 2022

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Give us a Call

For Borrowers: +962 79 870 4070

For Investors: +962 79 858 2253

icon-facebookicon-linkedinicon-instagramicon-twitter

* The historical return range is based on the annualized Internal Rate of Return (IRR) of liwwa investors' actual portfolios, taking into account late payments, defaults, write-offs, recoveries and service fees for all loans originated since 2013. The range represents the 15th to 85th percentile of returns for investors whose accounts have been open for at least 12 months. Individual results may vary. Historical performance is no guarantee of future returns, and the historical return range is not intended as investment advice or as a guarantee of the performance of investment opportunities.

Important Note: liwwa, Inc. does not guarantee investors a return and all investments carry risk, learn more about the investment risks. All transactions enabled through liwwa.com are subject to Terms of Service and the Investor Agreement.

All rights reserved. Copyright © 2022