MICROLENDING


IBS Journal May 2018


35


Good user experience and AI come from proper use of data – here’s how lenders do it


As the 2008 crisis made many banks quite reluctant to give away credit for those who would not pass their standards with flying colours, the economic recuperation is seeing lending companies finding new ways to assess the creditworthiness of their customers, as well as developing new ways to reach them


Junior Fintech Reporter Henry Vilar


I


n the area of lending, the most important aspect is risk assessment, the certainty that the money that one is giving away will return in due time to its original hands. The way


banks try to assess this is by knowing as much as possible from the borrower, and making an educated guess. The 2008 financial crisis made banks quite reluctant to lend money to those that did not present this certainty, and one of the most affected areas has perhaps been microlending. As opposed to business lending,


consumer microlending has demanded many resources to keep up with every stage of the process. In the digital age, these obstacles are being minimise – here’s how.


The cost of microlending


In the past decade, the area of microlending has been woefully underserved. When it comes to small loans, due to be paid back


www.ibsintelligence.com 35


cnythzl /iStock


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