Credit Scoring

Credit Scoring and   Electronic Loan Applica3ons  Rebecca Hughes  Innova3ons for Poverty Ac3on  2010 RBAP‐MABS Na.onal Roundtable Conference  Hya= Hotel and Casino, Manila  June 3, 2010 

Credit Scoring System  • IPA is partnering with three rural banks in the  Philippines to develop and test credit scoring systems  • Credit scoring models tailored to each bank,  developed using historical lending/borrowing data  • Designed to objec.vely predict a client’s likelihood of  repayment based on items such as:   – Cash ﬂow  – Debt capacity  – Past repayment pa=erns of similar loan clients 

Credit Scoring System: Interface 

Beneﬁts of Credit Scoring System  • To clients:   – Receive immediate approve/deny decision  – Loan decision based on objec.ve informa.on  • To banks:   – Poten.al for improved quality of clients  – Real‐.me loan and term decisions  – Portability of netbooks  – Greater accuracy of data  – “Impressiveness” factor  – Extensive data on microﬁnance clients 

Electronic Applica.ons  • Poten.al ﬁrst step in building credit scoring model  – Credit scoring modeling may involve external assistance/ analysis/exper.se  – But, the plaZorm on which it is built is dependent on high‐ quality, readily accessible borrower data  • Even if not moving toward credit scoring, carries  many of the same beneﬁts 

Beneﬁts of Electronic Applica.ons  • To clients:   – Receive immediate approve/deny decision  – Loan decision based on objec.ve informa.on  • To banks:   – Poten.al for improved quality of clients  – Real‐.me loan and term decisions  – Portability of netbooks  – Greater accuracy of data  – “Impressiveness” factor  – Extensive data on microﬁnance clients 

Credit Scoring

by MABSIV on Jun 11, 2010

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Credit Scoring — Presentation Transcript

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