Digiserv and Bank Alfalah have developed a consortium and signed an agreement with Karandaaz Pakistan for developing an innovative, cash-flow based, credit scoring model for small and medium enterprises (SMEs).
Karandaaz Pakistan, under its third round of Innovation Challenge Fund (ICF) had invited ideas from entities interested in developing and testing innovative credit scoring models for SME lending in the country. The project sponsor is UK’s Department for International Development (DFID), for driving the financial industry towards innovation and technology based innovative credit scoring models that will benefit the SME sector in the country.
On this auspicious event, Ali Sarfraz, CEO Karandaaz Pakistan said, “We are confident that the funding from Karandaaz for this consortium of Bank Alfalah and DigiServ will help the bank pursue the agenda of disruption and innovation in financial sector and develop a model of innovative credit scoring that favours SME lending. Through this Challenge Fund, Karandaaz has motivated innovators to look beyond the obvious and come up with credit scoring ideas that suit small and medium sized entrepreneurs. Small and medium sized businesses must be provided an environment where access to finance through formal channels is easy for them so that they grow, create more jobs, and benefit the overall economy.”
Mehreen Ahmed, Group Head Bank Alfalah said, “Bank Alfalah Limited is a dominant player in the Commercial & SME financing space, providing innovative solutions & supporting particularly the small borrowers with non-financial advisory services to help them scale up. We are grateful to Karandaaz Pakistan and their main sponsor, UK’s Department for International Development (DFID), for driving the financial industry towards innovation and technology based innovative credit scoring models that will benefit the SME sector in the country. We are pleased to announce this initiative as we firmly believe that the way forward is strengthening our SMEs and be able to provide greater access of banking facilities to them. A credit assessment scorecard going beyond the conventional methods of credit risk assessment should be an important catalyst in expanding our outreach to this very important sector of the country. Ultimately the aim is to make the credit assessment process more efficient and customized on the back of digitization & analytics.”
Dr Asim I Khwaja, Professor at Harvard Kennedy School & Director of the Centre for International Development at Harvard said, “DigiServ is striving to unleash the entrepreneurial potential of small businesses in Pakistan by enabling financial access to them through alternative credit scoring techniques. This partnership with Karandaaz and Bank Alfalah will help us design, test and scale solutions that demonstrate the possibilities offered by data and technology for the financial sector and generate both economic and social impact.”