AFPI and PEFINDO Launch "IdFintechScore" to Strengthen Lending Scoring
Mitigate risk and add credit scoring options for fintech lending actors
The Indonesian Joint Funding Fintech Association (AFPI) and PT PEFINDO Credit Bureau launched the IdFintechScore scoring product to strengthen consumer credit risk mitigation in the industry . IdFintechScore complements the credit scoring options used in the industry, and is not a new standard for players .
AFPI General Chair as well as CEO and Co-Founder of Investree Adrian Gunadi said the association maximized collaboration with a number of industry supporting ecosystems . This time, his party is collaborating with PEFINDO to strengthen the industry, especially risk mitigation related to credit scores.
"The existence of IdFintechScore is expected to strengthen the industry from bad loans, where currently AFPI also has a Fintech Data Center (FDC). We hope this will improve loan quality, in particular borrowers which has credit scoring which is good," said Adrian at the launch of the IdFintechScore in Yogyakarta, Tuesday (13/12).
President Director of PEFINDO IdScore Credit Bureau Yohanes Arts Abhimanyu said, in the current consumer sector can target opportunities for even higher loan disbursement by utilizing a credit score that is specifically designed according to the characteristics of the business. The results of the analysis will be more specific, accurate and sharp in order to maintain the quality of the loan portfolio while at the same time opening up business potential going forward.
Yohanes continued, IdFintechScore's advantage lay in scoring models which uses specific parameters and variables to explore the character of the borrower, eg payment behavior, recent over-indebtedness, and the level of utilization of facilities owned.
"Especially business especially the consumer sector has different characteristics from conventional loans in banks. These differences cover the features and types of products, market segments and targets, risk measurement including collectability level borrowers," he explained.
Therefore, to further optimize utilization credit scoring in the neighborhood , need adjustment scoring models in order to improve accuracy. That way, the results of the analysis can be in accordance with risk appetite, business processes, and market segments.
Contacted separately by DailySocial.id, AFPI Secretary General Sunu Widyatmoko said IdFintechScore is intended to support risk management in the form of a system scoring specific to the P2P industry lending. However, this product will be an option from the many choices of credit scoring service providers in Indonesia for use by perpetrators .
"Service provider scoring there really are some. This is good for the industry, so there are several choices," said Sunu.
The credit scoring industry
The potential for this business in Indonesia is so promising, given the large population unbankable rather than bankable. In this regard, a number of technology players are leveraging alternative data sources that they collect as a new way of analyzing a person's creditworthiness. They have come from players fintech, there is also from the segment E-commerce.
From the realm E-commerce, there is Tokopedia with its subsidiary Tokoscore. The company launched two products named "Income Prediction" and "Fraud Flags". Tokopedia is one of the leaders in the e-commerce industry in Indonesia. According to iPrice data, the average monthly visitor to the Tokopedia website reached 157,2 million in the first quarter of 2022. This figure rose 5,1% from the fourth quarter of 2021 which recorded 149,6 million visits.
This large data can be processed for good functions, one of which is to make it easier for financial companies to assess a person's eligibility before receiving credit. Alternative data used by Tokoscore to form an assessment, including the value of buying and selling goods on Tokopedia, relevance wishlist & product categories purchased with loan needs, shop talk, number of devices, and more.
The data is analyzed with AI technology and algorithms machine learning to obtain risk profile analysis of prospective borrowers.
Next, there is Amartha who launched Ascore.ai, a similar service targeted at individual and institutional users. Amartha's scoring platform is built on over a million ultra micro entrepreneur partners who have been in their ecosystem for the last seven years.
Then, SkorLife offers applications to access and monitor credit scores, credit reports, and other relevant data from national credit bureaus. In addition, a number of companies also offer similar solutions, for example Finantier, Pefindo Credit Bureau, CredoLab, Fineoz, Advance.ai, and others.