to repay loans upload contacts to their phones at a dramatically higher rate — a sign of their business growth . They also have fewer games on their devices . “ The training of our algorithm has been surprisingly good based on this nontypical
Despite most of its users ’ being blacklisted from accessing credit products , the bank ’ s loan repayment rate is 90 %.
— Quipu data
data ,” Siless says . Quipu has leveraged its model to extend 2,100 microloans to 1,600 borrowers . And despite most of its users ’ being blacklisted from accessing credit products , the bank ’ s loan repayment rate is 90 %.
Alternative data moves mainstream Alternative data provides information about micro-entrepreneurs and borrowers who may not have a traditional credit background . Information such as bank account cash flow , rental payment history , mobile phone and utility payments and even GPS location helps to fill in a borrower ’ s story . For lenders , though , alternative data hasn ’ t been easily accessible .
For example , on-time rent payments are rarely included in consumer credit scores , largely because there hasn ’ t been a simple way to report such data to the credit bureaus ( that ’ s changing , thanks to fintech solutions that enable rent payment reporting to credit bureaus and evolving credit score models that include rental payment data ). Even now , 60 % of fintech and financial services decision-makers cite limited access to alternative data sources as their top challenge , according to research from Provenir , a company that makes an AI-powered riskdecisioning platform .
In addition , many financial institutions haven ’ t had the technical capabilities to incorporate alternative data into their credit-decision processes . For example , “ in fiscal years 2016 – 2020 , less than 0.1 % of mortgages purchased by Fannie Mae and Freddie Mac ( governmentsponsored enterprises that purchase about half of all originated mortgages ) were made to borrowers without credit scores , an indication they were underwritten using alternative data ,” according to a 2021 report from the U . S . Government Accountability Office .
Kim Minor , senior vice president of global marketing at Provenir , says the alternative data space has become noticeably more competitive in the past 18 months . A few key developments are helping expand alternative data use rapidly . “ The enhanced data sources that come through alternative data are putting lenders at ease , and they ’ re starting to use that data to lend money to people who haven ’ t had access to traditional credit markets ,” Minor says .
Below / The couple works from their living room repackaging and branding spices to sell in shops and markets around the city .
PHOTOS BY DAVID ESTRADA LARRAÑETA
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