BEIRUT: Twelve years ago, Fares Kobeissi saw an opportunity in the inefficient and wasteful way that banks processed loan applications.
In 2007, he decided to venture into software programming and founded Bluering, an information technology company that pioneers credit automation solutions.
“We help banks automate their credit decision process – their ability to decide whether to lend someone or not,” said Kobeissi in an interview with The Daily Star from his offices in Beirut’s Hamra neighborhood.
“It’s a 100 percent Lebanese product all the way from the concept to development,” he added.
Banks – the ones that don’t use his software – still depend on time-wasting forms and paperwork that often has to be shipped to headquarters by the end of each day for analysis, he said.
Wastefulness does not end here, he said, since each document is photocopied and kept in files scattered across branches and headquarters.
In addition to wasting time and money, the “traditional way” vastly increases loan default risks. Necessary renewals of vital personal and corporate guarantees often go forgotten and errors are common, he said.
Banks, despite what many would think, often overlook to check on companies they offered loans to, he added. While at the time of lending the financial situation might be healthy, things could take a turn for the worse or the better without the bank noticing.
“A turn to good could mean a business opportunity, while a turn to the worse would require the bank to reassess its relation with the customer,” he said
“Our software solves this problem and automates the whole process from A to Z, starting with a client filling an application to when the bank analyst makes a decision,” Kobeissi said.
The software allows information to flow seamlessly from one bank department to another with all documents and data attached, including clients’ credit and lending histories, legal documents and guarantees.
Giving financial institutions the ability to develop credit scores, the software flags the portfolios that fall outside limits pre-set by the bank itself.
The data is digitalized and becomes accessible to loan analysts at the click of a button. The software tells analysts when it is due to renew documents and reassess a client’s financial situation.
Savings in paperwork and time are in excess of 60 percent, he said.
Time needed to make a decision on loan applications is cut by a massive 50 percent. Even more stunning, Kobeissi estimates that banks’ overall credit portfolios could improve by as much as 30 percent as a result of introducing the software.
Kobeissi’s company focuses entirely on its credit automation product instead of diversification.
“We offer very specialized and advanced software that we have gathered an immense experience in. This allows us to focus entirely on the development of our products and improve their quality, add features and upgrade constantly,” he said.
Building on the country’s strong banking sector, the company has already introduced the software to several Lebanese banks and is searching aggressively to expand into European and Middle Eastern markets.
So far, the company has developed three software programs covering banks’ major lending operations. In addition to Bluering Corporate Credit (for large enterprises) and Bluering Retail Credit (for consumer loans), it launched a software targeting small- and medium-enterprise financing.
Expanding SME lending in banks has been traditionally associated with high credit and operational risk, Kobeissi said.
“But this has been changing after the global financial crisis. Lending to SMEs has become a major area of growth,” he said.
The inspiration for its name came as astronomers discovered a blue ring around the planet Uranus. The color blue made it very unique among planetary rings, which are usually red because the particles are too small to be affected by the plant’s forces.
“This is how Bluering was discovered, ready to encircle and shield any system in the financial world,” Kobeissi said.