FICO and Lenddo are developing a score that will give lenders improved certainty around the risk assessment of people with the so called ‘thin-files’, those who don’t have enough data in their credit report to score. Both companies are committed to the common goal of enhancing financial inclusion around the world.
The collaboration will combine Lenddo’s dedicated knowledge in the use of nontraditional data for scoring and online verification with FICO’s established strength in credit scores that are predictive, transparent and fair.
Following the data published in the PriceWaterhouseCoopers India report for he Internet and Mobile Association of India (IAMAI) and Payments Council of India (PCI) released in October 2015, India’s unbanked population has decreased at around 324 million from 2011 to 2015, but still amounted to 233 million last year.
FICO and Lenddo new risk score adds to the Indian PM Narendra Modi’s financial inclusion plan called the Pradhan Mantri Jan Dhan Yojana (PMJDY), which is aimed to ensure that every Indian household has a bank account. This plan is responsible for the highest decrease in the number of unbanked people in the country. Precisely in 2014, when Modi’s plan was launched, the amount of unbanked fell 182 million, as pointed by PriceWaterhouseCoopers report.
FICO announced recently as well a new score in the US market, the FICO® Score XD, which can help lenders extend credit to people who do not have a standard FICO Score based on credit bureau data.
Lenddo was founded in 2011 to improve financial inclusion for 1 billion people around the world, enabling financial service providers to access and serve new and underserved markets using its disruptive technology and leveraging new sources of digital data, such as mobile-social digital footprints.
![Meeting of clients of the Indian microlender ESAF in the state of Kerala. Photo by Jaimoen87 (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons. Towatch the original file, click here https://commons.wikimedia.org/wiki/File:An_ESAF_%27Sangam%27_Meeting_in_progress_in_Kerala.jpg](https://eastwind.es/wp-content/uploads/2016/10/India_Microfinance_women_FICO_Lenndo_ESAF_Sangam_Meeting_in_progress_in_Kerala.jpg)
Established in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions.
Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.
Richard Eldridge, co-founder and chief executive at Lenddo, said, “We believe that helping qualified low- and middle-income consumers gain access to credit will improve their lives and quite possibly transform Indian society. Defeating the need of a credit history to obtain a loan is essential to bring unserved but qualified consumers into the formal economy and giving them access to mainstream financial institutions. Our partnership with FICO is an excellent match with our expertise and we are keen to work with them to augment the drive for financial inclusion in the world’s fastest growing economy.”
Jim Wehmann, EVP of Scores at FICO, said, “We see our partnership with Lenddo as a great synergy of analytics and scoring innovation, which we hope will give millions of creditworthy individuals access to credit. We already have received a very positive response in India from financial institutions, the regulators and government, and we look forward to announcing more very soon.”
Image over the headline.- ESAF Bamboo product making unit in Dumka, Jharkhand. Photo by Jaimoen87 (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons. To watch the original file click here
