How do we determine Risk Score?

The Risk Score of a lending company (LC) is determined in 3 parts:

1. The base of the score is calculated using the data from the latest financial statements, the information on the lender on a particular loan marketplace, as well as general public information on the LC and its operations. In this part, we review the company's profitability, liquidity, loan portfolio strength, as well as stability and credibility.
2. The calculated base score is then adjusted based on the risk assessment of the country-related factors in the country where the lending company runs its operations. This includes looking at factors like economic growth, currency strength, and geopolitical risks.
3. The base score is then also adjusted using the loan marketplace security structures multiple. The security structure multiple is determined by carefully evaluating the legal arrangement that the lending company has with the particular loan marketplace and with the investor. This allows us to see whether the provided security features increase the likelihood of fund recoveries in case of financial difficulties for the lending company.

Learn more about the details of lending company scoring here.