Data is being used by both new entrants and traditional lenders to extend smaller loans to smaller businesses and increase credit to underserved communities.
“A Growing number of fintechs are becoming increasingly reliant on using alternative data like cash-flow analysis as a key underwriting tool.
“The CEO and founder of FinRegLab discusses their research project on the use of cash flow data in underwriting.”
FinRegLab in the News
Creditworthiness Can Be Predicted by Cash-Flow Data, New Study Shows
www.paymentsjournal.com
“Increasingly, we see utilization of non-traditional means of assesssing credit worthiness, which is generally concentrated in the non-bank lending space.
Data both helps to underwrite applicants who lack traditional credit history and improves risk sorting among borrowers who are ranked similarly by traditional scoring systems.
FinRegLab in the News
Case-Flow data can predict creditworthiness, new study shows
www.americanbanker.com
“FinRegLab, a nonprofit that tests new technologies to foster an “inclusive financial marketplace” analyzed the data of six nonbank lender that use cash-flow data in their underwriting: Accion, Brigit, Kabbage, LendUp, Oportun, and Petal
The growth and use of data is increasing exponentially in the American economy and specifically within its financial systems. This data has the potential to benefit consumers and the broader economy in myriad ways.