Mumbai: Lenddo, a credit assessment financial technology company that uses non-traditional tools, is expanding its rating services to include microfinance institutions (MFIs), said a top executive.

Leading MFIs will be on board within six to eight weeks, said Abhinav Haldia, country director (India) at Lenddo.

The new service will cover individual MFI customers who live in urban areas and have an android phone. Lenddo will give its own score for these borrowers which will give an additional yardstick for MFIs to assess them.

At the end of March, about 62% of outstanding microfinance loans were in urban areas, according to data from Sa-Dhan, a self-regulatory MFI organization.

“Our own analysis along with credit scores will help to quicken the loan process and increase the ticket size of the loan based on given risk," said Haldia. 

Haldia explained that as soon as the customer’s information is uploaded on a mobile or tablet by the MFI field officer, the customer receives a text message which gives a link to the loan application. Once the application is downloaded on the customer phone and the customer agrees to share data, Lenddo assesses creditworthiness  using some of these data.

These data points comprises of contacts, short messages services (SMS), call history and browsing behaviour.

MFIs over the last six to 12 months have begun using tablet-based solutions while travelling to remote locations and capturing know your customer (KYC) details of customers and avoid complicated paperwork.

These new solutions have reduced the turnaround time required by these lenders, which has also helped in cutting operating costs.

“In the future we expect to build a score which will be a combination of both traditional as well as non traditional tools," said Haldia.

The company is planning to build an android application for its MFI partners in such a way that they can monitor their customers once an application is downloaded. The app will also send customers notifications regarding weekly or monthly payments. 

“It is a good move. Based on the historical records of the clients, loans can be tracked better," said P. Satish, executive director of Sa-Dhan.

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