CRC launches model to predict credit repayment delay

CRC Credit Bureau Limited in partnership with Dun & Bradstreet has launched a new scoring model called the ‘CRC Delay Propensity Score,’ to address credit challenges.

In a statement, it said, “In the ever-changing world of lending, financial institutions are constantly seeking ways to reduce their risks and increase their profits.

“One of the numerous challenges lenders face is the possibility of borrowers, who have never crossed 90 days past due, to begin to delay in repaying their loans due to factors outside their circle of influence.”

It added that, “The CRC Delay Propensity Score is a scoring model that predicts the likelihood of a borrower delaying loan repayments within the next 30-60 days due to socio-economic factors.

“The scoring model looks at borrowers who typically have never crossed the 90 days past due in their repayments. These factors may include the borrower’s credit history, number of dishonored cheques, and other financial information.”

The model used machine learning algorithms to continuously refine its predictions based on new data sources, it said.

CRC Credit Bureau launched the Application Programming Interface for data submission in 2020 to enable institutions submit information on their customers’ credit profiles daily.

It said one of the key benefits of the CRC Delay Propensity Score was that it provided lenders with a more accurate and objective assessment of a borrower’s creditworthiness.

This allowed lenders to enhance their credit review process, make better informed decisions, and adopt risk-based pricing in structuring loan terms.

It added that the CRC DPS could help lenders reduce the effects associated with delay in repayments.

By identifying borrowers who may delay payment, lenders could take proactive measures to mitigate the risk of loss by offering more flexible payment options, setting up automated reminders, or even restructuring the loan terms to better suit the borrower’s financial situation, the statement said.

The Group Managing Director/Chief Executive Officer at CRC Credit Bureau Limited, Dr. ‘Tunde Popoola, stated, “We are excited to introduce the CRC Delay Propensity Score to the lending industry.

“By providing lenders with a more accurate picture of borrower risk, we are helping to create a more stable lending environment that benefits everyone involved.”