Algorithms for issuing instant online microcredit
Forbes Magazine writes about the successful lending company Wonga.com . Unlike conventional banks, here the creditworthiness of the recipient is determined not by managers, but by computer algorithms. Up to 7,000 facts in open sources are collected for each client, after which the algorithms analyze them and calculate the maximum loan amount.
The online “bank” offers loans for several weeks at a very high percentage, and at the same time it carefully approaches the selection of borrowers. Algorithms filter out 70% of applications, but give out money within 15 minutes.
The maximum loan amount for a new customer is 400 pounds (about 640 dollars). Money is given for up to 31 days, and the average maturity of the loan in the service is about 15 days. Due to short-term lending, the profitability of the service literally rolls over: the annual percentage (APR) exceeds 4000%, but some customers are satisfied with such conditions if money can be received instantly.
A company executive explains the high APR in this video.
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Very many users need an instant loan: they need the money right away to pay for instant needs (to make a bet at a casino or a bookmaker’s office, to buy a present for their wife for today's anniversary, which is only now known, to urgently pay for treatment, etc. ). At the same time, clients can be quite solvent and respectable, but they can also be poor ludomans or fraudsters. The task of the algorithm is to determine this from banking databases within a few minutes.
Wonga started operations in 2008 and started making a profit six months after launch. Now the company has become the largest operator of short-term microloans in the UK. This year, the total amount of loans is projected at ÂŁ 50 million.
Algorithms for calculating the creditworthiness of the recipient are classified. This is done so that people cannot manipulate them and get loans in a fraudulent way.
The online “bank” offers loans for several weeks at a very high percentage, and at the same time it carefully approaches the selection of borrowers. Algorithms filter out 70% of applications, but give out money within 15 minutes.
The maximum loan amount for a new customer is 400 pounds (about 640 dollars). Money is given for up to 31 days, and the average maturity of the loan in the service is about 15 days. Due to short-term lending, the profitability of the service literally rolls over: the annual percentage (APR) exceeds 4000%, but some customers are satisfied with such conditions if money can be received instantly.
A company executive explains the high APR in this video.
')
Very many users need an instant loan: they need the money right away to pay for instant needs (to make a bet at a casino or a bookmaker’s office, to buy a present for their wife for today's anniversary, which is only now known, to urgently pay for treatment, etc. ). At the same time, clients can be quite solvent and respectable, but they can also be poor ludomans or fraudsters. The task of the algorithm is to determine this from banking databases within a few minutes.
Wonga started operations in 2008 and started making a profit six months after launch. Now the company has become the largest operator of short-term microloans in the UK. This year, the total amount of loans is projected at ÂŁ 50 million.
Algorithms for calculating the creditworthiness of the recipient are classified. This is done so that people cannot manipulate them and get loans in a fraudulent way.
Source: https://habr.com/ru/post/115674/
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