The ability to distinguish the risks enables the ability to better manage them.

Credit risk is one of the major risks faced by banking and financial institutions which leads to the possibility of a loss resulting from a borrower’s failure to repay a loan or meet contractual obligations. In 2018, we piloted a Machine Learning Algorithm in the biggest microfinance institution that helped improve their credit decision.

The Challenge

Since this institution is a bank that specialized in micro credit and prone to high NPL since there is no system to accurately analyze the default risks for the unbankable market segment.

The Solution

As a pilot project, we developed a machine learning powered credit scoring system and psychometric scoring to capture ‘the unbankables’.

The Outcome:

  • Reduce credit failure by 50%.
  • Increase potential revenue by 10%.