Challenge
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.
Solution
The bank decided to launch a mobile lending product, enabling their customers to apply for and receive loans instantly on their mobile phones.
To support this new product, the bank implemented the Paretix Advanced Credit Solutions & Intelligence. This infrastructure enables the bank to:
- Integrate with mobile network operators (MNOs) and other data sources to access alternative data
- Build and deploy advanced machine learning models that leverage this alternative data to predict credit risk
- Automate the entire credit decisioning process, from application to disbursement
- Continuously monitor and optimize credit policies and models
Results
The launch of the mobile lending product has been a great success:
- Over 1 million loans disbursed in the first year
- Default rates significantly lower than traditional lending products
- High customer satisfaction and engagement
- Significant increase in the bank's retail customer base
By leveraging alternative data and advanced analytics, the bank has been able to provide credit to a previously underserved segment of the population, while maintaining a low risk profile.