A fintech startup will help JS Bank reach out to customers, who cannot be profiled for lending purposes through conventional means, by using its Artificial Intelligence based credit scoring model.
A Memorandum of Understanding (MoU) for the purpose has been signed between the bank and CreditFix, a digital lending platform.
With CreditFix’s support, JS Bank will be able to better assess prospective borrowers for default risk. The credit scores generated using the AI-based model will enable the bank to reach out to consumers who may otherwise not qualify for bank loans based on conventional credit rating mechanisms.
CreditFix helps these new-to-credit and thin-file customers to build credit scores overtime. Its AI-based credit scoring model uses behavioral data and financial indicators to assess borrowers for risk of default. The fintech uses credit insights from 5,000+ data points to profile new customers and help them secure loans to buy revenue-generating assets such as livestock, smart grids, farm equipment or cars.
In a statement issued after the MoU signing ceremony, both companies hoped to ‘ensure innovation to maximize the consumer’s banking experience’.
“We believe this partnership is going to revolutionize credit scoring mechanism in Pakistan, allowing us to widen our consumer credit products to a much larger population,” said Raja Abdullah, the group head of Consumer Banking and Specialized Products at JS Bank.
CreditFix CEO Owais Zaidi said, “We are very excited about the opportunity to make lending faster, easier, and accessible, while driving down the cost of acquisition and processing for our partner banks.”
He said the mission of CreditFix was to bring access to credit at fair terms to over 50 million Pakistanis left out by formal lending institutions. Earlier this year, the startup was announced as winner of Karandaaz Pakistan 2017 Fintech Disrupt Challenge where the company received $100,000 as prize money.