By ASILA JALIL / Pic By MUHD AMIN NAHARUL
BANK Islam Malaysia Bhd and local financial technology company Global Psytech Sdn Bhd are set to implement a credit risk assessment solution — General Financial Insights (GFI).
GFI assesses the risk of providing financing to an applicant even in the absence of traditional credit history.
The solution allows financial institutions to make confident lending decisions to fund applicants, particularly entrepreneurs from micro, small and medium enterprises (MSMEs) sector.
Bank Islam CEO Mohd Muazzam Mohamed said the partnership between both companies is aimed at addressing the credit gap and improving MSMEs access for financing.
“GFI will contribute to bridging the financing gap that affects MSMEs and further catalyse MSMEs contribution to Malaysia’s economy.
“It has the potential to promote more equitable economic growth, financial inclusion and increased participation of young business owners,” he said adding that the collaboration will position Bank Islam as a leader in using advanced risk assessment technologies that benefit MSMEs.
He said it would further enhance the existing underwriting and credit-scoring models, while capitalising on the digital technologies to improve financial services.
GFI accurately estimates the risks associated with financing using behavioural analytics and machine learning algorithms. It will automatically generate detailed reports that will assist a financier in deciding on the approval or rejection of an application.
“Bank Islam endeavours to strengthen the role and impact of Islamic finance by adopting the principles of Value-based Intermediation (‘VBI’) as advocated by Bank Negara Malaysia.
“It is at the heart of our business model in delivering a sustainable performance with a strategic focus on supporting economic, social and environmental development, with emphasis on the MSMEs sector,” added Muazzam.
Bank Islam also expects to post a higher loan approval rate following the implementation of GFI, especially for MSME clients as the system will expedite the current procedures of loan application.
Meanwhile, Global Psytech CEO Dr Haniza Yon said the company has leveraged its extensive experience in developing digital assessment solutions by offering the technology that could benefit financiers and MSMEs.
“This method will allow financiers to provide appropriately- priced credit efficiently and securely to foster the growth of the entrepreneurship ecosystem in Malaysia,” she said.