Equifax India Launches Graduation Score
Mumbai, 4th May, 2018 – Equifax India, registered as Equifax Credit Information Services Private Limited (ECIS), today announced the launch of Graduation Score, a first of its kind in the industry. The Graduation score assesses risk of customers who were primarily used to borrowing as part of a group to “graduate” to taking loans as individuals. This score has been built based on performance of group loan customers from the credit bureau data. This score will also enable digitization of the individual lending to group loan process within lenders. The Graduation Score from Equifax enables primarily group loan customers to accelerate to individual loans retail loans therefore becoming eligible for loans of higher amounts and longer tenures.
GraduationScore is a bureau credit score developed by Equifax to enable financialinstitutions to lend individual loans to customers who have primarily had grouploans in the past. The concept of group loans was originally developed to havenew-to-credit customers take loans with low EMIs to be paid as a groups andthen graduate to individual loans with higher sanctioned amounts and EMIs and alower probability of default.
“Financialinstitutions rely on manual assessment of loan applications which require highcosts and time for evaluation,” said K M Nanaiah, Country Head, Equifax India.“Using Graduation Score from Equifax, they can approve these loans digitally onthe basis of the customer’s probability of default on individual loans andtherefore improve risk assessment of the product. The current customer viewfrom Graduation Score and combined CIR supports consistent credit decisions,strong revenue generation and profitability throughout the customer lifecycle.”
As the grouploan customers are readying themselves for repayment of higher value loans asindividuals, Graduation score will provide the much needed impetus in riskassessment. Currently, financial institutions rely largely on manual assessmentof loan applications and bureau data of group, individual and retail loans forevaluation, which ends up being costly and inefficient. Graduation Scoreenables them to evaluate individual loans for customers that have not hadindividual loans in the past and increase the amount of individual lendingwhile they drive good quality of credit too.