With the genX growing up, working and becoming the bread-earners, mindset of India is changing. From a conservative, savings’ mindset economy, we’re moving to a consumers’ economy. The fact that unsecured lending has increased from 28% to 32% in the past 3 years and the fact that retail lending is growing at 17%, forms the basis of what we’re claiming.
However, getting credit-scores for these millennials is difficult. A lot of these people are new-to-credit, or do not have sufficient credit history. These are the cases where use of traditional data by itself is insufficient. This makes it difficult for banks to make lending decisions for these “credit invisible” customers.
We, at CreditVidya, are helping banks and other financial institutions solve this problem. Alternate data comes to our rescue. We have managed to source 10,000+ data points for every prospective borrower using social and geographical fingerprints. This is essentially a large pool of unstructured data, on which we apply our proprietary machine learning algorithms, and make it semi-structured. This semi-structured data is in addition to the (limited, if we may say) traditional data available, helping financial institutions to determine predictive behaviour of the borrower.
But what is the outcome when our partners (now, 20+ financial institutions) used our products?
Higher approval rates: Our products have helped our partners to disburse small ticket loans of upto 60,000 INR with an increased approval rate.
Low cost of underwriting: By automating the lending process for unsecured small ticket loans, we’ve helped our partners to cut down costs by 50%.
Faster TAT: The turn-around-time for loan disbursal of these small-ticket loans were brought down from a-couple-of-days to a-couple-of-minutes. Less than 30 minutes, to be precise.
Customers in need of urgent loans for medical emergencies or social events, have therefore benefitted the most. The reduced time of access and the ease of access makes our products the go-to for digitization of credit. This also is the reason why our case-study got featured in Governance Now’s Financial Inclusion Casebook.
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