Moody’s is moving a bit closer to the world of small business lending. The company, which provides data and business intelligence solutions, like credit ratings and research for the financial world, said Thursday (Feb. 25) that it reached a deal to acquire a share of Finagraph.
Finagraph similarly provides automated data aggregation and analysis, with a focus on helping banks be able to assess the creditworthiness of small and medium-sized enterprises.
The investment by Moody’s will reportedly help Finagraph develop its data analytics technology and help propel adoption of its tools among SMEs and lenders, the companies said.
For Moody’s, the acquisition means it can offer its clients a broader, more robust tool in the field of credit risk management, strengthening its position, particularly for small business lenders. Finagraph's technologies will become integrated into Moody’s Analytics Lending Cloud software and risk models, the firm added.
“We believe there is an important opportunity to better serve financial institutions that lend to small and medium-sized businesses with solutions that streamline the credit assessment and approval process,” stated Moody’s Analytics President Mark Almeida.
He added that Moody’s acquired WebEquity in 2014 in an effort to strengthen its credit analysis and risk management services for banks; the investment in Finagraph propels Moody’s along that path.
“Finagraph’s technology and insight into small business financials enable us to accelerate our efforts to transform the way lenders interact with small businesses, helping bankers make better, faster lending decisions for the growing SME market,” Almeida noted.
The financial details of the acquisition were not disclosed. Under the deal, Moody’s gains a minority stake in Finagraph, as well as a place on its board of directors.