New Credit Decisioning Data: Detect Your Customer’s Free Cash Flow in Decide
Enhancing Decide’s data source for improved credit decisioning accuracy, such that risk concerns become almost non-existent for credit providers, remains key for us at Indicina.
In line with this, we are excited to announce our latest update, which will help you identify how much Free Cash Flow (FCF) a borrower can conveniently pay back.
The expectation from Decide is to give credit providers like you an edge in the financial space. Hence, being aware of what your customers are able to afford or the spare cash on their hands, will ensure that you are better informed on the credit amount that you can grant them.
Decide is a credit decisioning API designed for every credit provider to accurately check the eligibility and affordability of a borrower in 1 minute.
As powerful as Decide currently is with its over 50 variables for decisioning, being able to capture how much free cash your customer has, is one of the ideal ways to avoid credit risks. Here’s how:
- You are able to predict defaults: The FCF takes you from just identifying the right people for credit to estimating how much your customers can conveniently afford to pay back without defaulting.
- You get better credit amount precision: Knowing the free cash flow gives you insight on the ideal amount you can safely grant a customer in form of a loan or short-term financing for purchases (BNPL) without worrying about the risk of debt.
- You get to grow your loan portfolio: Working together with Decide’s other variables, the FCF variables also helps to filter for credit biases, therefore ensuring that you can identify and grant credit to more people who are capable of paying back.
Defining the Variables
To capture free cash flow over a time period, Decide will provide results on the Maximum EMI Eligibility and Confidence Score of the customer. These are the two variables that represent the free cash flow.
- Maximum EMI eligibility: This is a finite number which will indicate the maximum amount a customer can repay on a monthly basis in the next 6–12 months period.
- Confidence Score: This is a score between 0 to 100 where 0 means the model has no confidence that the customer will be able to repay the loan, whereas 100 means that the model has full confidence.
Our latest update has placed a bottle cap on credit decisioning by extending towards helping you assess affordability for lesser credit risk.
Happy decisioning! 🎉