MICROWD
Fintech
Real-time default risk tool
In regions where access to credit is limited, microfinance institutions play a vital role in financing projects led by women entrepreneurs.
In this context, targeting exceptional women in each community for larger loans stands out as a differentiated approach. This strategy seeks to enhance social impact while controlling risks and increasing profitability. The result is a significant boost to economic empowerment and gender equity in areas lacking traditional access to loans and financial services in general.
Challenge
Find ways to expand lending without compromising the delinquency or default rate.
This implies a balance between financial inclusion and risk management. Also, to simplify the number of questions asked to potential borrowers in order to streamline the lending process.
Solution
We have developed a real-time default risk tool, based on objective and measurable metrics and oriented to the optimization of volume increase and default limitation criteria, which allows to increase the volume of good credit concessions.
The model acts by providing the end user with a probability of default between 0 and 1, deciding together what the threshold is.
Its main objective is to grant more loans without increasing the level of default/non-payment, so we offer in the solution a subsequent analysis of the possible levels of risk depending on the threshold to be established and they themselves ultimately decide whether or not to assume that risk.
