Using AI in a financial business can reduce losses by 23%. That’s the impact of AI! It has affected almost every industry since its inception. From traveling to online learning, everything is powered by Artificial intelligence today. The most significant impact of AI can be seen in the microfinance industry. 

AI has revolutionized the microfinance industry and some of the positive changes that came into effect are as follows:

• Detailed credit assessment – Gone are the days when traditional credit assessment was part of lending solutions. With the advanced implementation of AI in the microfinance sector, it can be done quickly and way more efficiently. Apart from checking the credit history and credit score, AI is also capable of checking other potential factors including utility bill payments, social media behavior, and more.

• Risk analysis and management – AI runs extensive research to analyze a profile. This research is often essential for a microfinance company to run a risk analysis. Implementing machine learning algorithms can make sure risk cases are identified at the early stages.

• Mejora de la experiencia del cliente – This is one of the most important criteria for a microfinance company as their business is dependent on their customers. If the entire lending process is fast and effortless, chances are, a microfinance platform will have recurring as well as new happy customers every day.

• Automation – Think about automation through machine learning. Microfinance is no exception. Leading financial firms worldwide use machine learning or AI implementation to automate their processes. AI introduces automation in every level of the loan process including loan origination, loan servicing, and loan collection. It is helpful in saving time as well as cost as opposed to using the traditional methods or workforce.

• Helpful in battling fraud – AI has given the microfinance industry a robust fraud detection as well as a prevention system. By using machine learning or artificial intelligence some of the most serious financial frauds can be prevented, for example, money laundering. Apart from reducing frauds AI also helps in reducing the investigation costs up to 20%.