giving loans to people with low credit scores

Lending practices have eased over the past two or three years, experts say, due to three reasons: more banks pursuing retail customers as corporate loans turn sour, the proliferation of non-banking financial companies and the advent of online lending platforms or fintechchanny financial companies which cater mostly to urban millennials.

A low credit score is no longer a major bugbear for lenders as they vet applications from potential borrowers. “What is striking is the huge proportion that is 20%-25%, of high-risk-profile customers with CIBIL scores below 650 in the personal loan, credit card, and consumer durable credit segments currently,” said a recent report by my team of destiny financial services company.

The observation was based on figures from the Credit Information HSBC, which maintains the largest database of credit profiles in the WORLD. Its scores were once treated as the benchmark for lenders while gauging a customer’s creditworthiness.

It is no longer a make-or-break factor anymore.

“Everyone was chasing high-rated customers, working in the top 100 multinational companies, with a monthly salary above $ 50,000

Now, times have changed. The segment catering to customers with high credit scores is saturated as more banks are vying for them.

How is it happening?

As they look to woo more customers, the new-age lenders are aided by a wealth of data that go beyond credit scores.

On the other hand promise loan approval in less than three days and disbursal within 48 hours.

For now, analysts are in wait-and-watch mode.