What This Means for a Bank
FatooraFi's scoring model can identify 58% of invoices as low-risk (Bands A+B) with only 8% late rate — versus 88% late rate for high-risk (Band E). This 21.4x separation lets you fast-track the good invoices, price risk accurately for the middle, and decline or hold the worst — instead of treating every SME the same.
58%
Fast-Track Eligible
Band A+B invoices with <10% late rate
21.4x
Risk Separation
Band E late rate vs Band A late rate
5
Policy Tiers
Fast-track → Review → Hold → Decline
Why it matters: Without segmentation, you either reject too many good SMEs (losing revenue) or approve too many risky ones (taking losses). This model gives you the tool to do both — grow volume while managing risk.
2. Risk Band Stratification
| Band | Risk Level | n (test) | Late | Late Rate | Policy |
|---|---|---|---|---|---|
| A | Low Risk | 340 | 14 | 4.1% | Fast-track |
| B | Moderate | 86 | 22 | 25.6% | Fast-track |
| C | Fair | 77 | 39 | 50.6% | Review |
| D | Elevated | 81 | 51 | 63.0% | Enhanced review |
| E | High Risk | 156 | 137 | 87.8% | Decline/Hold |
21.4x separation (Band E / Band A late rate)
Higher separation = better discrimination between good and bad invoices
3. Annual Value Calculator
Enter your portfolio parameters to estimate annual value from improved risk triage.
Scenario Analysis
| Scenario | Loss Reduction | Volume Uplift | Loss Savings | Profit Uplift | Total/Year |
|---|---|---|---|---|---|
| Conservative | 4% | 1% | SAR 3.2M | SAR 1.5M | SAR 4.7M |
| Base | 8% | 1.6% | SAR 6.4M | SAR 2.4M | SAR 8.8M |
| Upside | 12% | 2.5% | SAR 9.6M | SAR 3.8M | SAR 13.3M |
Pilot will measure actual improvement on your portfolio.
Base Case Annual Value
SAR 8.8M/year
Your Portfolio Parameters
SAR 1BSAR 100B
Annual invoice financing / SME receivables volume (not total banking assets)
0.5%5%
Use your definition: write-offs, DPD 90+, or charged-off exposure
20%80%
Fee rate minus funding cost minus ops cost
0.5%3%
Improvement Assumptions (Inputs)
4% (conservative)12% (upside)
% reduction in losses from improved triage. Pilot will measure this.
1% (conservative)2.5% (upside)
Current Baseline Losses
SAR 80.0M/year
(2% write-off × 40% LGD × SAR 10B volume)
(2% write-off × 40% LGD × SAR 10B volume)
Where do these inputs come from?
Annual Financed Volume: SME receivables / invoice finance exposure from your finance team
Write-off Rate: Bank's internal DPD 90+ rate, write-off ratio, or charged-off exposure %
LGD: Existing loss-given-default assumptions from credit risk team
Net Margin: Fee rate – funding cost – ops cost (from treasury/product)
Improvement %: Estimated from model lift; calibrated on bank data during pilot
Formulas
Loss Savings = Volume × Write-off% × LGD × Improvement%
Profit Uplift = Volume × Uplift% × Net Margin
Implementation path: Proof of Value (90 days) → Production Integration (60–90 days)
📊
Pilot validates these assumptions on your portfolio
A 90-day proof-of-concept measures actual loss reduction and volume uplift against your historical data. Results calibrate these inputs to your specific portfolio characteristics.
4. What Drives Predictions
Customer Avg Settle TimeFatooraFi
64.5%
Invoice Amount
16.5%
Disputed Flag
13.3%
Paperless (Electronic)FatooraFi
3.1%
Country/Region
2.6%
68% of predictive power comes from FatooraFi-unique signals (buyer payment history, invoice verification). These are operationalized through ZATCA integration and not readily available to banks today.
Ready for a Pilot?
Validate these results on your own portfolio with a 90-day proof of concept.