Gumiz Sharpens Its Credit Tools In Challenging Credit Bulgarian Environment

Aug. 27, 2009 - PRLog -- Bulgarian credit grantors face a tough market outlook. Through 2009 big Bulgarian banks have quietly retreated from consumer credit activities as liquidity tightened and credit quality of the consumer deteriorated.

For some lenders, though, consumer credit lies at the heart of their strategy and the question is not to withdraw but how to manage this difficult outlook and convert it into an opportunity for future growth.

Take the case of Gumiz, a Bulgarian finance house that finance goods ranging from home furnishing to automotive equipment. After monitoring the quality of the existing loan portfolio, the company decided to tighten its credit policy very much as other competitors did. This resulted in deteriorated relationship with points of sales, where salespeople watched some sales falling through due to lack of finance. That in turn elevated the danger of the dealer switching from Gumiz to another credit grantor.

How can you manage risk and commercial relationships simultaneously? What Gumiz did was to convert some previously rejected application profiles to accepted loans with a combination of terms of business that reflected the higher risk. Doing so, the losses associated to the risk were priced in and the dealer was happy to make more sales.

Gumiz was able to implement this sophisticated credit strategy through IRB Modellica® Decision Engine. This advanced product enables Gumiz to set up, test and deploy risk adjusted terms of business in no time and without the need to resort to IT.

After six months of implementing the system, Gumiz is ready for a turnaround of the environment, meanwhile assuring both the loyalty of its dealers and the quality of its portfolio.

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IRB Modellica® provides analytical services and software solutions to automate the credit decision process.

IRB Modellica is integrated in the Scoresoft group and has distributors in the United States, United Kingdom, Russia and South Africa.