Small business owners score with microfinance

ACCION reduces delinquency 15 percent, cuts loan-approval time to three days

SAS^® Desktop Data Mining for Midsize Business helps ACCION Texas-Louisiana successfully lend money to small-business owners who wouldn’t qualify for loans through traditional lending institutions. The nonprofit microfinance organization has been so successful that 14 microfinance organizations across the country have outsourced all or part of their underwriting to ACCION. With more than $26 million in their portfolio, ACCION Texas-Louisiana is the largest microlender in the United States.

The scorecard gives us the tools to manage risk better, increase our efficiency and provide faster turnaround times for our customers.

Janie Barrera
President, CEO

ACCION: At a Glance

The organization lends $500 to $100,000 to small-business owners with an average FICO credit score of 585, well below most banks’ acceptable thresholds.
In order to lend without a high default rate, the organization must evaluate 35 separate criteria to find business owners capable of repaying loans.
The organization needed to quickly score applicants on its unique criteria to keep its underwriting staff lean and free up loan officers to seek good candidates.
ACCION Texas-Louisiana needed a solution that could be managed by a team with little or no programming experience.

With SAS, ACCION:

Created a scorecard reducing the number of loan applications that must be reviewed by underwriters by 50 percent (the other half are automatically approved or denied).
Decreased the time it takes loan officers to prepare one application from four hours to 30 minutes.
Reduced loan approval time from two weeks to three days.

The scorecard is so successful that ACCION:

Dropped the percentage of loans needing restructuring from 7 to 2.5 percent.
Decreased its delinquency rate from 20 to 5 percent.
Was able to market and sell its underwriting capabilities to 14 other microfinance organizations.
Gained the respect and partnership of Citigroup Inc. Citigroup currently buys up to $30 million worth of loans from ACCION.

The value of SAS

“The scorecard gives us the information needed to manage risk, increase our efficiency and provide faster turnaround times for our customers," says Janie Barrera, ACCION Texas-Louisiana President and CEO.

Challenge

Needed quick, effective means of determining creditworthiness for businesses that don’t qualify for traditional bank loans

Solution

SAS^® Desktop Data Mining for Midsize Business

Benefits

Delinquency rate decreased from 20 to 5%.
Loan restructuring rate dropped from 7 to 2.5%.

Los resultados que se ilustran en este artículo son específicos a las situaciones, modelos de negocios, datos aportados y entornos de cómputo en particular que se describen aquí. Cada experiencia del cliente de SAS es única basada en variables de negocios y técnicas y todas las declaraciones se deben considerar no típicas. Los ahorros, resultados y características de desempeño reales variarán dependiendo de las configuraciones y condiciones de los clientes individuales. SAS no garantiza ni augura que todos los clientes lograrán resultados similares. Las únicas garantías aplicables a los productos y servicios de SAS son aquellas que se estipulan en las declaraciones de garantía explícitas en el contrato por escrito relativo a dichos productos y servicios. No se debe considerar que nada de lo aquí mencionado constituye una garantía adicional. Los clientes han compartido sus éxitos con SAS como parte de un intercambio contractual convenido o resumen de éxito de proyectos tras una implementación exitosa de software de SAS. Los nombres de marcas y productos son marcas comerciales de sus respectivas compañías.