Creative Economy Credit Analysis Flashcards

A set of vocabulary flashcards detailing credit metrics, risk assessments, and economic impacts of the creative economy in Kenya based on portfolio data.

Documented Application Pipeline Floor

The credible floor of demonstrated creative-economy credit demand in Kenya, valued at $KES\,3.75B$ in documented applications.

Creative-Economy Financing Gap

The percentage of creative-economy credit demand that remains unfunded or partially funded, estimated at $40\text{--}60\%$.

Vintage Slopes (Sub-sector Trends)

Positive vintage slopes are seen in digital-content adjacent sub-sectors like fashion e-commerce and music streaming, while traditional media-adjacent sub-sectors show flat or negative slopes.

Origination-Stage Observable Attributes

The five statistically significant attributes associated with $24\text{-month}$ repayment outcomes ($AUC \ge 0.70$): revenue model, customer concentration, formality, prior finance access, and business age.

Multivariate Model of Default

A model using origination-stage data that can correctly rank-order $\ge 70\%$ of pairs of defaulters vs. survivors.

Default Indicators (Red Flags)

The presence of three or more origination-stage red flags (e.g., high customer concentration, short business history, informal status) correlates with default rates $\ge 2 \times$ the portfolio median.

Survivorship Bias Mitigation

A data handling technique where loans that exited the book early are treated as censored rather than deleted.

Cash-Flow Stress Point

When a borrower's time-to-revenue exceeds the loan's grace period by $\ge 1 \text{ quarter}$, associated with restructuring rates $\ge 2 \times$ higher.

High Customer Concentration Risk

A concentration of $> 60\%$ in a single client, correlating with a default probability $\ge 1.5 \times$ the portfolio median.

Technical Default vs. Terminal Loss Ratio

The ratio of terminal LGD (Loss Given Default) to technical default rate in the HEVA portfolio, which is $\le 0.5$, indicating at least half of technical defaults recover.

Creative Sector Risk Profile (Adjusted)

When LGD-adjusted, the creative sector's risk profile falls within the band of general SME lending in Kenya, and below agriculture in some vintages.

Jobs-per-shilling-lent (Creative Sector)

A metric reflecting low asset intensity where the creative sector generates $\ge 1.5 \times$ the Kenya general-SME benchmark.

Adjacent Sector Revenue Multiplier

The association of each shilling lent to the creative sector with $KES\,1.3\text{--}1.8$ in revenue for adjacent sectors like hospitality, transport, and informal employment.

Economic Viability Floor

The range where lending cost-to-serve is less than or equal to gross margin, identified as the $KES\,500K\text{--}1M$ range.

Blended Finance Design Space

A structure combining $\sim 5\text{pp}$ of concessional capital with commercial senior debt to close the viability gap for specific segments.