At a time when banks are facing burgeoning non-performing assets (NPAs) and low credit offtake, TransUnion CIBIL has unveiled a system to drive access to finance to as many as 15 lakh incremental borrowers involving an asset size of Rs 68,858 crore every year.
The new system, CreditVision, is based on algorithms which predict risk and expand credit opportunities by intensively studying the trended data that unlocks the patterns in payment, exposure and spend behavior. These algorithms, which are based on the past 36 months of trended data, enable identification of comprehensive and specific customer behavior and are delivered in an easily usable and quantitative format to enable financial institutions to use these customer insights for making more precise lending decisions. “This would pave way for possibilities to expand the retail credit market and promote access to cheaper, easier and faster credit opportunities, which is a major aspect of financial inclusion in this digital age,” Cibil said.
CIBIL said its analysis of consumer credit demand and behavior using CreditVision, shows that it could enable credit access to an incremental 15 lakh borrowers every year without compromising on risk. These 15 lakh borrowers could provide Indian banks an incremental asset size of around Rs 68,858 crore, at a low delinquency rate, Crisil said. It will also identify an additional 20 lakh borrowers who currently have access to banking credit, but may be eligible for higher lines of credit or higher loan-to-value which will give an incremental asset size of around Rs 29,153 crore at a low delinquency rate, it said.
Cibil MD and CEO Satish Pillai said, “these new age CreditVision algorithms are a definite game changer for the credit industry which will enable phenomenal market expansion while helping define lending strategy for a growing nation on a digital path like ours. It may be the much needed tool for Indian credit sector which is burdened with recognized NPA.