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This week’s featured story is about the unsung heroes behind every fintech lender.
As more firms – including ecommerce companies, super apps, and even mortgage platforms – venture into lending, demand for reliable and robust credit-scoring tech has gone up.
These lending enablers are rarely talked about, but here’s what you need to know: According to an industry source, the quality of most credit scorecards on the market are mediocre at best. “Alternative data” can also sometimes be irrelevant to the companies or products they’re being applied to – or require a lot of work to treat and qualify.
This not only has repercussions for the segment of individuals and businesses currently overlooked by formal financial institutions but also for the firms extending loans to them.
My colleague Budi’s Big Story this week deep dives into Semangat Digital Bangsa or Tokoscore, the credit-scoring business of Indonesian ecommerce platform Tokopedia, and considers how it might fit into the GoTo ecosystem.
Tokoscore analyzes the behavior, activity, and transaction history of users on the Tokopedia platform to assess their creditworthiness. It can also extrapolate that data to predict income levels and even identify fraud. The service is currently used by Dhanapala – Tokopedia’s peer-to-peer lending platform – as well as third-party financial institutions like buy now, pay later firm Kredivo.
Speaking of BNPL, Singapore unveiled an industry code for the sector last week. While the implementation of the code is undoubtedly progress for the sector as a whole, there are caveats – as I outline in this week’s Hot Take.
– Melissa
THE BIG STORY
How credit analysis can help Tokopedia score against ecommerce rivals
Image credit: Timmy Loen
Tokoscore has the potential to increase the loan books and reduce non-repayments for not just its parent firm GoTo but also for third parties.
THE HOT TAKE
Singapore’s new BNPL code of conduct
NEWS YOU SHOULD KNOW
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