The credit analysis of projects that are presented on October is performed in-house. We gather quantitative and qualitative information necessary to assess the risk of a project and determine an interest rate. We have 2 types of credit analyses.
Standard projects undergo a combination of manual and automatic credit analysis. Our financial analysts are in charge of collecting and analysing both quantitative and qualitative data. For example, they gather information from annual reports and input it into our scoring model. Such model is then filled, either automatically or manually, with much more information about a company's financial results, market outlook and management team. This generates a credit score and an interest rate that would be offered.
You may find more information about our standard credit analysis in our dedicated tutorial:
Instant projects undergo fully automatic credit analysis using two different loan assessment models: Financial X-Ray and Transaction X-Ray. Both models use machine learning algorithms to assess the borrower's probability of default. The main difference between these automatic loan assessment models is the data used to score the project:
Financial X-Ray relies on financial and behavioural information and compares it to a large amount of data gathered by October across our five countries.
Transaction X-Ray analyses the borrower's bank transactions over the last 12 months, checking for payment regularity and consistency.
Both Financial X-Ray and Transaction X-Ray scorings provide a probability of default, which is then converted into a credit score using the October scale (ranging from A+ to C-).
You may find more information on the credit analysis of Instant projects in our dedicated tutorial: