Industry Banking
Region APAC
Solution Custom Credit Risk Assessment Application
Context
The chief concern in lending is the potential for borrowers to fail in repaying their loans, a risk that extends to digital lending. To manage credit-related uncertainties, Non-Banking Financial Companies (NBFCs) must conduct precise evaluations of borrowers' creditworthiness. Leveraging advanced data analytics and credit assessment models, NBFCs can scrutinize factors such as repayment capabilities, credit history, and other pertinent elements. This strategic approach empowers NBFCs to make well-informed lending choices, thereby diminishing the likelihood of defaults.
Problem statement
The client company’s pre-existing incumbent process for credit risk assessment was driven by a rule-based algorithm that was posing problems in maintaining consistency and timeliness. The field verification data used for the process proved inadequate and there was heavy reliance on bureau data to make up for the inconsistencies. The dependency proved problematic as the bureau data did not comprise all the required information about the target population.
Impact
- Improved accuracy of decisions led to reduced delinquency & improvement in portfolio performance.
- Established foundation for Reject Inferencing & Cross Selling Opportunities.