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Scaling a lending business presents a significant dilemma: higher loan volume increases potential profits but also the risk of default and fraud. Thorough risk assessment is essential, yet the sheer number of loans can make this process overwhelming. Lenders that embrace the benefits of technologies such as automation, Artificial Intelligence (AI), and Python can strengthen […]
Lenders generally need to cross-examine the applicant’s financial strengths and weaknesses before approving a loan application. Financial statement analysis helps them make these decisions; it involves evaluating an applicant’s financial statements to assess their financial health and determine their creditworthiness. This includes information about the borrower’s assets, liabilities, income, and expenses. Financial statement analysis for a […]
Extending credit inherently often carries risk for lenders, such as: Borrower’s inability to repay due to job loss, unexpected expenses, or poor financial management. Economic downturns can lead to increased defaults across an entire portfolio. Lenders may fall victim to identity theft or false information provided by the applicant. Many lenders rely on gaining deeper, […]
Imagine applying for a loan to start your dream business. The lender is excited about your idea, but they need one crucial thing: proof that you can afford to repay the loan. That’s where income verification comes in – a crucial step in the credit appraisal system which determines your ability to handle the financial responsibility. […]
Many lenders often decide to entice borrowers with the promise of instant loans. However, lenders’ urgency to disburse more loans and borrowers’ eagerness to receive them can have adverse consequences, especially if the former does not perform due diligence. For example, lenders face the risk of engaging in loan fraud when dealing with dubious borrowers. […]
Digital transformation in India has paved the way for accelerated growth in the lending domain. According to reports, the lending market size was valued at $ 270 billion in 2022. This figure is projected to grow at a compound annual growth rate of 22% to over $ 720 billion in 2030. A mix of banks, […]
Lenders face several challenges concerning the credit risk management process. Some of these include inadequate data quality, lack of skilled underwriting personnel, lack of data security, lack of inclusive risk assessment strategies, and poor compliance monitoring frameworks. These multiple challenges converge into one major challenge – the inability to appraise potential borrowers’ creditworthiness accurately. In […]
As the world becomes increasingly interconnected and digitised, each transaction and interaction generates valuable data, which, if harnessed well, can offer invaluable insights and aid decision-making. One such revolutionary use of data is the leveraging of Goods and Service Tax (GST) data by lenders to make more objective lending decisions. GSTR analysis helps lenders employ […]
India is presently undergoing tech-led transformation, driving digitisation across key sectors such as manufacturing, healthcare, transport, agriculture, and finance. Among these, the financial technology (fintech companies) sector has emerged as a particularly dynamic force. With strong government backing and a surge in fintech innovation, India today hosts the third-largest fintech ecosystem globally. Valued at $31 […]
Conducting a financial audit is one of the most critical activities that enables businesses to understand whether they are on the path to profit. It helps them identify their financial liabilities, risks, and potential fraud. The audit also enables them to determine the status of compliance and taxes to be paid. Therefore, a financial audit […]
