How Investree Utilizes New Data in their Loan Grading System

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How Investree Utilizes New Data in their Loan Grading System

Salman Baharuddin, Chief of Sales at Investree, is one of the speakers at the journalist class and he covered a rather interesting topic regarding their utilization of New Data in their loan grading system.

On the 2nd of May 2019, Investree held their journalist class with theme of “Bagaimana Fintech Membuat Semua Bisa Tumbuh” or in english,”How Fintech Makes All Grow.”

Investree itself is a fintech startup originated in Indonesia that acts as an online marketplace to meet borrowers with lenders. It is basically a peer-to-peer lending startup that aims to fund small and medium enterprises.

Salman Baharuddin, Chief of Sales at Investree, covered a rather interesting topic regarding their utilization of New Data.

What is New Data

New Data in simple terms is a new breed of data that emerged as a result of Industry 4.0. Smart devices such as your smartphone produces these new types of data.

What Investree has done however, is to utilize these New Data in order to improve the concept of loan grading.

New Data in Loan Grading

Loan grading system represents each individuals’ credit-worthiness and overall financial responsibility. It determines whether you are eligible to take a loan from the credit issuer or not.

One of the problem with such loan grading system is that it takes into account your previous credit record. A part of the population however, simply do not have such record as they have not made a loan yet. This is only the first of many problems with credit score.

By utilizing New Data, Investree has been able to fill the gap on what was lacking. Not just that, just by having more data, margins of error will also be lower than before. This results in a higher accuracy when assessing potential loaners. This is one of the reason why Investree has been able to keep their non-performing loan at around 0%.

Without going into the details, here are a few of the New Data that they are using to assess Loan Grading; Accounting Software Data, E-Commerce Transaction Data, Payment Gateway Data, and Procurement Data.

On top of that, Investree collaborated with PEFINDO, a credit bureau, in order to collate data from various players throughout the industry.

Next Steps

New Data is everywhere in today’s digital era, but it is up to us to utilize them well and appropriately.

As for the next steps, it is apparent that Investree and other lending bodies need to keep on adding more and more New Data

Do you think there are any other type of data that could be added in order to further reduce the margin of error and increase accuracy?

What if you want to assess individuals instead of enterprise?

This is part of our series on Investree. Click here for the next part.

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