Lenders have long relied on income statements to assess repayment capacity. Yet, defaults still occur among borrowers with seemingly high and stable salaries. Income tells you how much someone earns, not how consistently they manage their money. Traditional credit assessments overlook a critical factor – cash flow stability. The volatility score changes that, offering lenders […]
GST returns are now one of the most dependable indicators of a business’s financial footprint. They reflect declared revenues, tax compliance, and transaction consistency. However, when GST filings don’t align with actual bank inflows, it raises serious questions about the data credibility and borrower transparency. According to the CAG report of 2024, the authorities identified […]
Fixed Obligation to Income Ratio (FOIR) shows how much of your monthly income is already locked into fixed payments. This includes EMI payments, rent, and insurance premiums. When you apply for a loan, lenders assess your FOIR ratio to see if you can handle more debt. Most lenders in India favour your FOIR to stay […]
Lending decisions are only as strong as the financial data behind them. Yet, lenders know that not all numbers on tax returns or balance sheets can be taken at face value. GST-Bank Reconciliation provides one of the most effective ways to ensure this transparency. This process involves aligning a company’s Goods and Services Tax (GST) […]
Traditional credit scoring, led by CIBIL and other bureaus, has been the backbone of lending decisions for many decades. However, with the undeserved and new-to-credit segments’ increasing need (and demand) for loans and the microfinance delinquency rate moving up to 4.3% in 2024, lenders are realising that single scores only tell half the story about […]
In 2023, India’s gross non-performing assets (NPAs) stoo͏d at͏ o͏ver ₹6 lak͏h crore. Muc͏h ͏of͏ this is blamed ͏on late detection ͏of credit stress. Ac͏cording to the RBI’s Finan͏c͏ial St͏abili͏ty Repo͏rt, early detecti͏on mecha͏nisms could hav͏e prevented the accumulation of bad loans. Yet, many lenders s͏ti͏ll s͏truggl͏e with setting up robu͏st early warning signals in […]
As lenders scale their operations, it becomes more important for them to gauge a borrower’s creditworthiness with accuracy. Otherwise, it can lead to the growth of non-performing assets (NPAs) and more delinquencies. As of March 2024, the percentage of gross non-performing assets (GNPA) in India was as follows: 1.2% per personal loan, 6.2% in the […]
Credit appraisal is an integral componеnt of thе lеnding еcosystеm in India, еnabling financial institutions to assеss borrowеrs’ crеditworthinеss in-dеpth. This is a major tool that lеndеrs usе to rеducе thе risks connеctеd with non-rеpaymеnt. This is also important because it gives borrowers access to funds on favourablе terms and conditions. This framework, supеrvisеd by […]
In a dynamic environment, several external factors — from market downturns to operational disruptions — can impact a borrower’s repayment ability. Thus, lenders must build credit appraisal systems that account for multiple risks and are robust enough to handle worst-case scenarios. Leveraging superior bank statement analysis and financial data analytics software empowers lenders to strengthen […]
