How NBFCs can resolve issues of credit availability through AI and Analytics?

Non-Banking Financial Companies (NBFCs) have emerged as a reliable alternative to the mainstream banks in India. Thanks to the rise of technology that allowed NBFCs to make use of AI, ML and Analytics to build products for their customers. Today, several NBFCs are using big data technologies to resolve issues of on - loan management, fraud detection, regulatory compliance and credit availability.


How AI-Powered Analytics Analyze Credit Availability?


Customers are the vital focus area for NBFCs. Hence, they are focused on developing innovative products, catering to low-income people in unorganized sectors. In such a scenario, companies should adopt AI powered business models and Analytics to facilitate the design and launch of customized products. Here is how NBFCs can resolve issues of credit availability and loan management by using AI and Analytics -

  1. Credit Risk Assessment

Although India’s NBFCs are growing their market share, they need to be careful about money handling and credit risk assessment. The traditional method of credit risk analysis is based on the past experiences with the customer.


On the contrary, analyses the credit risk using a data-based credit scoring system. With millions of Indians holding loans worth trillions of rupees – the big data technologies like AI and Analytics can help NBFCs improve the returns on the loans they hold.

  1. Alter Status Quo

The issue of credit availability has garnered a global concern in recent years. Data Analytics provides NBFCs with an opportunity to transform the way they allocate credit and risk. The ability of AI and ML technologies to avoid traditional credit reporting system allows NBFCs to alter the status quo. The goal of NBFCs in this regard is to incorporate new data and provide credit to customers on better terms than the current.

  1. Fraud Detection

Today, NBFCs face an overabundance of poor quality credit. Additionally, the use of too many sources of data is causing an alarming situation. As per the law, it is illegal to discriminate gender while determining credit eligibility. However, there are countless proxies for gender, which makes the data redundant and inaccurate. NBFCs can make use of AI & Analytics to get a clear picture of the proxies for race and increase data accuracy.

  1. Credit Score

The use of AI, ML and Analytics to analyse data in credit availability and loan management is likely to grow significantly. There are billions of people without a real credit history. It is obvious that the more data you collect about them, the more likely you would be to predict/understand their behaviour – including their chances of repaying the loan.



AI is the way of future and implementing in financial sectors may potentially increase the country’s economy. Banks and NBFCs in India should adopt AL and ML to stay relevant in the ever-changing financial environment.


Data Analytics can accurately use the digital footprint of the individual to determine their creditworthiness. Eventually, it  can yield better results than traditional methods. Instead of finding people with a low credit score, NBFCs must use Analytics to give plausible excuses to provide credit to those with a poor score.


In short, Big Data technologies have created an excellent opportunity for NBFCs to provide services without taking additional risks.


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