We started out with a base model with relevant parameters that were of interest. To obtain data to train our models, AbhiPaisa went ahead with the bold decision of giving out loans based on existing credit models. In fact, we even went ahead with issuing a few loans that against the recommendation of existing credit models. The results (defaults, successful payments) of all these loans were used to train the AI model. Once the model started predicting the results with reasonable accuracy, a second set of loans were disbursed. As expected, and much to the relief of the AbhiPaisa, the machine started outperforming the current credit models/ SMEs in the decision of issuing a loan.
It is fascinating that technology has evolved to a stage where it is able to allow us to get a look into the psyche of a person, something which SMEs are unable to do. We have been greatly encouraged by the results and are working on exciting problems that can be solved by AI & ML.