OVERVIEW
Over the last few years, governments, NGOs and to a lower extent, the private sector, have all invested huge efforts and capital to help the unbanked population in emerging markets access the formal financial system. The common belief is that financial inclusion will enable governments to remit funds to their citizens in a safer manner, thereby reducing corruption and fraud. In addition to financial inclusion, the migration to digital payments will also enable individuals and businesses to transact in a manner that is both cheaper and safer, thereby promoting entrepreneurship and growth.
The growth in digital payments for the unbanked over the last 10 years has been phenomenal due to different mechanisms such as mobile money in Sub-Saharan Africa or government-initiated projects in India such as Adhar, digital India and payment banks.
The main objective of payment banks is to help India reach full financial inclusion. Currently, payment banks are restricted to offering payment and savings products and are prohibited from offering any credit products to their customers.
At the same time, traditional financial institutions like banks and micro-finance institutions (MFIs) have the license and the expertise to offer credit, but often lack the reach and the data to serve the unbanked and underbanked population effectively.
This is where collaborative lending comes in. By partnering with MNOs and payment banks, traditional financial institutions can leverage their reach and data to provide credit to those who need it most.
Paretix is helping to facilitate these partnerships by providing the Advanced Credit Solutions & Intelligence needed to manage the risk and automate the credit decisioning process. Our platform enables partners to:
- Securely share and analyze data from multiple sources.
- Build and deploy advanced machine learning models that leverage alternative data.
- Automate the entire credit decisioning process, from application to disbursement.
- Continuously monitor and optimize credit policies and models.
By working together, MNOs, payment banks, and traditional financial institutions can help to drive financial inclusion and economic growth in India and beyond.