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Revolutionizing Microfinance Industry with Machine Learning

By finbraine 

Revolutionizing Microfinance Industry with Machine Learning

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.
  • Amélioration de l'expérience client – 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%.

 

CredBraine - A Perfect Example of AI Revolutionizing The Microfinance Industry

FinBraine’s CredBraine for instance is a perfect example of an AI-based lending platform. It provides banks, micro-lenders, telecoms, and wallet service providers with advanced technology. It allows them to thrive through BIG data analytics.

 

CredBraine has revolutionized the way loan origination, servicing, and collection is done. It facilitates lenders with intelligent lending, smart credit, and advanced scoring. Thus giving access to quality credit and acceptance rates.

Benefits of Implementing AI From Customer Point of View

 

These are the perks of using AI by small businesses or micro-lending companies. However, fintech machine learning provides the best of both worlds. It is also useful from a customer point of view offering benefits such as:


  • Quick KYC – Instead of spending hours on physical and time-consuming KYC, now micro-lending platform users can do quick e-KYC at the comfort of their homes. By using automatic ID verification, it becomes easier to process the loan application.
  • Non-traditional credit assessment – Credit history and credit score were the most basic factors to qualify for a loan earlier. But now with the help of advancement in the microfinance sector through AI, it is also possible for the unbanked to take a loan. Instead of traditional credit checks, your social behavior, utility payments, and other non-traditional parameters will be checked.
  • Quick credit and repayment – Unlike traditional loan approval, AI can process your loan quickly. Instead of waiting for several days to get the amount credited into your account, your application will be approved instantly. After the loan gets credited into your account, you’ll be instantly notified. Another advantage of using AI-based microfinance platforms is that you will be automatically notified whenever your due date arrives. It will help to maintain your credit score as well as trustworthiness with the lending institution.

 

Conclusion

AI or machine learning is still in its beginning stages in the microfinance industry. Although it has made noteworthy changes in the traditional processes of the industry. Needless to say, it is reshaping the industry for good. By adding automation in the processes, it has made it possible to save both time and labor.

 

Another added benefit is the security. Since AI can assess both traditional as well as non-traditional data of the user, there are negligible chances of fraud by the debtors. It is not just a boon for the lenders but helps the borrowers as well.


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