Saudi credit bureaus provide access to loans for millions of people with scores

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Vision, Advocacy and Education

Saudi Credit Bureau (SIMAH), a leader in credit bureau information management in the Middle East and North Africa (MENA), has successfully managed the rollout and adoption of the FICO® score by lenders in the country, enabling millions more Saudi customers. Getting loans from banks. This growth in Saudi financial inclusion has been made possible by SIMAH’s advocacy efforts with financial institutions and parallel education campaigns with consumers.

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“We have been traveling in the Kingdom since 2011, to enhance financial inclusion through lending and the adoption of advanced risk assessment tools,” said SIMAH CEO Swed AlZahrani.

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You can read about this story in the full media release.

Saudi going beyond salary data for financial inclusion

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Prior to implementation, lenders in the sector relied heavily on salary data to gauge a consumer’s propensity to repay a loan. This meant that many sections such as the self-employed, entrepreneurs, retirees and others were struggling to get loans. SIMAH worked closely with lenders to demonstrate the predictive power of scoring and its ability to enhance portfolio performance.

“Initially, to facilitate adoption, SIMAH offered lenders free access to the score to test and demonstrate its predictive power,” AlZahrani explained. “The results were strong, so it didn’t take long for lenders to be reassured and adopt the bureau-provided FICO score, which allowed them to reliably onboard new customer segments.”

Educating consumers and addressing false narratives

The second challenge was to educate the Saudi public about credit scoring and financial practices that would be most effective for building and maintaining a healthy credit history and score.

“SIMAH sought to address the importance of balanced loan commitments that were paid on time,” AlZahrani said. “This was important, as many false narratives initially existed among consumers, such as the idea that you must have little or no credit to maintain a good score.”

Created in partnership with FICO, the leading global scoring specialist, SIMAH works to solve your business challenges by developing risk assessment tools using a fully fledged experimental scoring model fitted to your local market. SIMAH was the first to introduce the scoring product in the country. Now in its fourth edition, the empirical FICO® score model based on SIMAH data provides a new scoring mechanism and incorporates important local factors that present unique and enhanced value to Saudi lenders and creditors.

tailored analytics

Over 700 Saudi Arabia specific features were developed according to the specifics, constraints and trends of the Saudi market. Due attention and analysis was given to facilities like salaried loans, migrant and telecom data. These important local factors were then used to create predictive characteristics that presented unique and enhanced value to Saudi lenders.

SIMAH worked closely with lenders to demonstrate the importance of incorporating credit scoring into origin, account management and collections. Adopting the FICO® score has allowed lenders to grow their portfolios and drive financial inclusion.

“The work done by SIMAH shows the impact credit scoring can have on the market,” said Nikhil Behl, chief marketing officer at FICO. “Their results reinforce what we see in other markets – a significant increase in financial inclusion that helps transform lives as well as improve the overall expansion of the economy. All this while expanding profitable business for lenders. .

For its achievements, SIMAH won the 2022 FICO® Decision Award for Financial Inclusion.

“The judges were impressed by the successful development and roll out of credit scoring in Saudi Arabia,” said Dinesh Suresh, one of the judges on Digital Build for Consumer Secured Lending and FICO Decision Awards at OCBC Bank. “SIMAH helped develop a pathway to credit access through the use of a bespoke model built from local data and strong advocacy with Saudi lenders to adopt a new approach to lending.”

How FICO can help clients improve your ability to assess risk

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