WASHINGTON – The U.S. Small Business Administration is implementing a risk-based approach to overseeing lenders that includes an early warning predictive score component and a more comprehensive lender review process. SBA Administrator Hector Barreto said the risk-based approach will put the agency in a better position to identify and manage risk in its portfolio. "The more efficient, streamlined monitoring of our lenders will result in significant benefits for them and for the agency alike. It also furthers the Administration's push to leverage technology into the agency's programs," he added. The risk-based system was developed for the SBA by Dun & Bradstreet and Fair Isaac. It provides the SBA with the ability to assess the performance of individual lenders and evaluate the overall performance of the SBA's 7(a) and 504 loan portfolios. The entire SBA loan portfolio is evaluated for portfolio management purposes, using the Dun & Bradstreet/Fair Isaac Small Business Predictive Score on a quarterly basis. Once scored, the SBA analyzes the portfolio to quantify loan and lender performance and to track relevant trends.
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