The Credit Analytics Revolution in SME Lending

The Credit Analytics Revolution in SME Lending

Automated, data-driven credit decisioning is streamlining the operations of financial institutions of all sizes. AI-powered, next-generation credit-decisioning models and credit risk analytics solutions are being widely applied by both traditional lenders like banks and alternative lenders.

In this post, we’ll take a deep dive into some of the challenges involved in implementing a data-driven credit decisioning model - and how SME lenders can overcome these and enjoy the benefits of the credit analytics revolution.

Case Study: MSME Group Loans – in Mexico

Case Study: MSME Group Loans – in Mexico

Providing credit to self employed and micro businesses in emerging markets is difficult. Usually these kinds of businesses cannot provide the required documentations needed by lenders to correctly evaluate the lending risk. One solution to overcome this lack of information is to form lending groups. The peer pressure and the shared liability in such groups leads to better loan performances also in difficult market conditions. This lending model is successfully being applied worldwide.

Case Study:Mobile Lending – in Eastern Africa

Case Study:Mobile Lending – in Eastern Africa

In most Sub-Saharan Africa lending to retail customers has not seen the growth rates witnessed in other regions in the world. The main reasons for this lack of credit offers on the supply side are related to high operational costs and to the general lack of credit history for large segments of the population. The traditional credit underwriting processes and data sources cannot help to change this situation.

MNO and MFIs Partner to Lend to the Underbanked - India

MNO and MFIs Partner to Lend to the Underbanked - India

Over the last few years, governments, NGOs and to a lower extent, the private sector, have all invested huge efforts and capital to help the unbanked population in emerging markets access the formal financial system. The common belief is that financial inclusion will enable governments to remit funds to their citizens in a safer manner, thereby reducing corruption and fraud. In addition to financial inclusion, the migration to digital payments will also enable individuals and businesses to transact in a manner that is both cheaper and safer, thereby promoting entrepreneurship and growth.

6 Reasons Your Bank Needs Digitalized Lending

6 Reasons Your Bank Needs Digitalized Lending

Most banks have already integrated a mobile banking offering into their services. Allowing for fund transfer or cash withdrawals without human interaction is not new.

The next step for banks is mobile lending: allowing customers to apply for, receive and access loaned funds instantly and automatically, using only their mobile device. This kind of offering has many benefits, including cutting loan origination costs, lowering risk, reducing loan turnaround times, enabling more customized product offerings and allowing your bank to gain a competitive advantage.

In the Mobile Money Competition, Mobile Lending is King

In the Mobile Money Competition, Mobile Lending is King

Mobile lending holds tremendous promise for mobile money providers throughout the developing world. Mobile money providers have the opportunity to be the market leader in many segments, providing real value to customers in the form of readily available credit. 

Is Nigeria Ready for Mobile Lending?

Who and where will be the next big success story in lending technology?  Nigeria is the next hot spot for mobile lending—despite the failure of mobile money in the country, and even, perhaps, because of it.

There are three main factors at play: 1) governmental initiatives to improve access to financial services and broadband internet, 2) the rate of growth in both of those fields independent of the government, and 3) the fact that only around 30 percent of people currently have access to retail credit. Taken together, these factors will result in a population using cell phones to access financial services for the first time.

Among the most exciting results of this revolution will be accessible, mobile loans for consumers. A strong desire for credit provides opportunity for a bank to emerge as the leader of Nigerian mobile lending—offering a service no one else can match to a customer base no other bank has tapped.

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