Risk Model Overview

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Risk Framework Structure

Overall Risk Score (0-100)
  └─ 7 Risk Categories (weighted average)
      └─ 5 Subcategories each (35 total indicators)
          └─ Traffic-light scoring (LOW / MODERATE / HIGH / CRITICAL)

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7 Risk Categories

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Scoring Methodology

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Risk Levels

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Calculation Process

1. Subcategory Scoring (35 indicators)
   • Each subcategory is scored 0-100 based on data extracted from business plans, interviews, or manual data entry
   • AI agents analyze quantitative metrics and qualitative factors
   • Evidence from source documents is linked to each score
2. Category Aggregation (7 categories)
   • Category score = average of 5 subcategory scores
   • Example: Financial Risk = avg(Revenue, Costs, Credit, Liquidity, Capital)
3. Overall Risk Score
   • Overall score = weighted average of 7 category scores
   • All categories currently have equal weight (subject to change based on sector/region)

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Data Schema

interface RiskScore {
  id: string;
  assessmentId: string;
  category: RiskCategory;  // FINANCIAL | CLIMATE_ENVIRONMENTAL | etc.
  score: number;           // 0-100
  level: RiskLevel;        // LOW | MODERATE | HIGH | CRITICAL
  subcategories: SubcategoryScore[];  // Array of 5 subcategories
  evidence: string | null; // Supporting evidence from documents
  narrative: string | null; // AI-generated explanation
  recommendations: Recommendation[];  // Mitigation strategies
}

interface SubcategoryScore {
  name: string;            // e.g., "Revenue Risk"
  indicator: string;       // e.g., "Revenue Concentration"
  score: number;           // 0-100
  level: RiskLevel;        // LOW | MODERATE | HIGH | CRITICAL
  evidence: string | null; // Specific data points
  mitigation: string | null; // Suggested actions
}

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AI-Powered Analysis

• Risk Analysis Agent: Analyzes business data across all 7 categories
• Evidence Extraction: Links scores to specific data points in source documents
• Narrative Generation: Creates human-readable explanations for each score
• Recommendation Engine: Generates prioritized mitigation strategies

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Use Cases

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For Analysts

• Due Diligence: Quickly identify high-risk areas in loan applications
• Portfolio Monitoring: Track risk trends across multiple assessments
• Report Generation: Export comprehensive PDF reports for stakeholders

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For Business Owners

• Self-Assessment: Understand business vulnerabilities
• Improvement Planning: Prioritize mitigation actions based on risk severity
• Investor Communication: Demonstrate risk management practices

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For Decision Makers

• Investment Decisions: Compare risk profiles across multiple SMEs
• Policy Design: Identify systemic risks in agricultural sectors
• Resource Allocation: Target support programs to highest-risk areas

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Next Steps