Credit Analysis: Micro and Large Retailers
Posted: Thu Jan 23, 2025 9:04 am
Installment sales help to retain customers and increase a store's sales . However, even knowing this, there is a big misconception when it comes to how to perform credit analysis for small and large operations.
It is very common for small stores or even large credit operations to believe that the credit model, which runs in a network of 20 stores, is different from the model for a small neighborhood store or for a network of 100 stores.
To analyze this situation, it is worth highlighting that the credit operation consists of three pillars, regardless of the size of the store:
Credit analysis;
Organization of the operation;
Credit recovery.
In this way, the same customer who buys on credit at the “João facebook database Calçados” store also buys with a card from Renner or Casas Bahia – here, it is also worth analyzing which is the best option for your customers: installment plan or store card ?
In short, I want to say that what differentiates one operation from another is not the size of the store , but rather the vision that the entrepreneur has about the credit operation.
Stores that have a profitable credit operation, in addition to selling the product, also sell the financial service (credit).
With Meu Crediário , I have the experience of talking to the most diverse types of traditional retail entrepreneurs that exist in Brazil. They are entrepreneurs with one, five, twenty, fifty or even three hundred stores…
The surprising thing is that I always leave these meetings even more convinced that the Brazilian retailer is, for the most part, the main obstacle to sustainable growth in the installment sales operation.
But why does this happen? That’s what I want to explain. Let’s go…
Automating your credit analysis and approval process will transform your results! Watch this video and learn how:
YouTube video
Team resistance and entrepreneur resistance
Hundreds of stores believe that the credit analysis department (credit agent) is responsible for credit analysis and default control in the store.
Furthermore, they believe that the information that determines whether or not credit is granted is based mainly on information found in Credit Bureaus – an old, very outdated model that does not work.
Of the three pillars I mentioned previously, I am convinced that structured credit analysis and the organization of the credit operation are the main components for a credit operation that really generates results.
When we talk about structured credit analysis, we are talking about a new model, in which the credit decision is made based on a statistical model, automation of credit limits and intelligence in credit bureau queries.
The organization of the credit operation
In short, it involves the rationalization of internal processes (credit automatically approved), reduction of personnel costs and centralization of certain operations.
It is possible to observe cases in which 99% of the credit transaction is done automatically, without human involvement. In this context, the seller himself negotiates with the customer and finds the best payment terms in installments. And, with this, delivers a differentiated shopping experience to the consumer.
The size of the store does not change the credit granting model at all. What changes, in essence, is the vision that each entrepreneur has for their business, do you see?
Those who achieve success have a broad business vision, knowing how to apply store clustering , for example.
So, if you are an entrepreneur, keep in mind the importance of your vision for the growth of your business. Now, the next step: to continue specializing and learning about credit operations, continue reading our blog . It is full of rich content to help you achieve greater and greater success on this journey!
Want to learn more about how to stand out with good credit strategies? Schedule a conversation with one of our experts by clicking here.
It is very common for small stores or even large credit operations to believe that the credit model, which runs in a network of 20 stores, is different from the model for a small neighborhood store or for a network of 100 stores.
To analyze this situation, it is worth highlighting that the credit operation consists of three pillars, regardless of the size of the store:
Credit analysis;
Organization of the operation;
Credit recovery.
In this way, the same customer who buys on credit at the “João facebook database Calçados” store also buys with a card from Renner or Casas Bahia – here, it is also worth analyzing which is the best option for your customers: installment plan or store card ?
In short, I want to say that what differentiates one operation from another is not the size of the store , but rather the vision that the entrepreneur has about the credit operation.
Stores that have a profitable credit operation, in addition to selling the product, also sell the financial service (credit).
With Meu Crediário , I have the experience of talking to the most diverse types of traditional retail entrepreneurs that exist in Brazil. They are entrepreneurs with one, five, twenty, fifty or even three hundred stores…
The surprising thing is that I always leave these meetings even more convinced that the Brazilian retailer is, for the most part, the main obstacle to sustainable growth in the installment sales operation.
But why does this happen? That’s what I want to explain. Let’s go…
Automating your credit analysis and approval process will transform your results! Watch this video and learn how:
YouTube video
Team resistance and entrepreneur resistance
Hundreds of stores believe that the credit analysis department (credit agent) is responsible for credit analysis and default control in the store.
Furthermore, they believe that the information that determines whether or not credit is granted is based mainly on information found in Credit Bureaus – an old, very outdated model that does not work.
Of the three pillars I mentioned previously, I am convinced that structured credit analysis and the organization of the credit operation are the main components for a credit operation that really generates results.
When we talk about structured credit analysis, we are talking about a new model, in which the credit decision is made based on a statistical model, automation of credit limits and intelligence in credit bureau queries.
The organization of the credit operation
In short, it involves the rationalization of internal processes (credit automatically approved), reduction of personnel costs and centralization of certain operations.
It is possible to observe cases in which 99% of the credit transaction is done automatically, without human involvement. In this context, the seller himself negotiates with the customer and finds the best payment terms in installments. And, with this, delivers a differentiated shopping experience to the consumer.
The size of the store does not change the credit granting model at all. What changes, in essence, is the vision that each entrepreneur has for their business, do you see?
Those who achieve success have a broad business vision, knowing how to apply store clustering , for example.
So, if you are an entrepreneur, keep in mind the importance of your vision for the growth of your business. Now, the next step: to continue specializing and learning about credit operations, continue reading our blog . It is full of rich content to help you achieve greater and greater success on this journey!
Want to learn more about how to stand out with good credit strategies? Schedule a conversation with one of our experts by clicking here.