A scorecard from SAS helps the largest non-profit microloan provider in the US, Accion Texas-Louisiana, speed loans to small business owners who don't qualify for traditional loans.
With SAS Desktop Data Mining for Midsize Business, from the leader in business analytics, ACCION Texas-Louisiana has also reduced the delinquency rate by 76 percent and loan restructuring rate by 64 percent.
SAS helped ACCION Texas-Louisiana create a scorecard that halved the number of loan applications requiring underwriter review - the remainder are automatically approved or denied. Also, loan officers can now prepare an application in only 30 minutes compared to four hours, and loan approval times have plunged from two weeks to three days.
"The scorecard gives us the information needed to manage risk, increase our efficiency and provide faster turnaround times for our customers," said Janie Barrera, ACCION Texas-Louisiana President and CEO.
With its scorecard, the non-profit microfinance institution, with a portfolio totaling $26 million, won the business of underwriting loans for 14 additional microfinance organizations nationwide. Also Citigroup Inc. partnered with ACCION Texas-Louisiana, purchasing up to $30 million worth of micro-loans, because of its successful scorecard-based prequalification tool and loan management capabilities.
To minimize default rates, ACCION Texas-Louisiana evaluates 35 separate criteria to find individuals capable of repaying small loans. The ability to quickly score applicants on its unique criteria keeps its underwriting staff lean and frees up loan officers to seek good candidates. The organization needed a solution that could be developed and maintained by management and staff with no programming experience.
ACCION Texas-Louisiana has achieved significant economies of scale, processing in one month what would take some of its microfinance clients one year. ACCION Texas-Louisiana also plans to use SAS software to better understand and target small business owners, specifically ramping up segmentation analysis and marketing efforts for the organization.
ACCION Texas-Louisiana licensed SAS with help from Pinnacle Solutions of Indianapolis, which included advice on product selection and implementation strategy.