When we get a financing request from an SME, our Credit team will assess the request based on a list of submitted documents that includes bank statements and accounts receivable (AR) aging lists. On top of other factors, our credit scoring model takes into account counterparty, liquidity and concentration risk. The Credit team will then recommend an interest rate band which is typically at a 2% range based on our risk assessment of the SME.
This pricing method considers factors such as actual and expected cash flows, note structure (repayment schedule, tenor, security and more), issuer's company structure, PG's credit worthiness, issuer's credit rating, plus others.
It’s possible for us to use this approach for the majority of cases that we review, but in some instances, we may take an exceptional review. We understand that our pricing has to remain competitive in the market, and this may require us to minimally move outside the pricing band.