Mibanco Uses FICO Platform to Expand Microlending and Help Customers During the Pandemic
Largest microfinance bank in
SÃO PAULO--(BUSINESS WIRE)--Mar. 17, 2022-- Highlights:
- Mibanco has boosted its lending capacity and management agility during the pandemic
- Mibanco has reduced the time taken to put policy into production by 90 percent
- Mibanco has cut annual IT development expenditure by 20 percent
- Mibanco won a 2022 FICO® Decisions Award for financial inclusion
Mibanco, the largest microfinance bank in both
More information: https://www.fico.com/en/products/fico-decision-modeler
“Mibanco’s goal is to expand access to credit for the unbanked or credit invisible,” said
Prior to the implementation, the entire credit flow, including the policies and various scores, was developed within the bank's core system. This meant when any lending changes were needed, software development within the core was required.
“It could take anywhere between 3 to 12 months whenever credit risk wanted to make a change,” said Valera. “Requests went to IT, meetings were held, changes were prioritized by committee, technical documents prepared, development, testing and so on. As a result, we were lacking the agility we wanted and failing to extend microcredit to the largest number of consumers possible.”
Mibanco needed to adopt a solution to make more precise, value-based decisions at the origination stage, enabling them to grow more profitable portfolios while managing customer-level risk.
Mibanco implemented FICO’s technology in two stages. The first was to enable FICO® Platform - Decision Modeler to be connected directly to the core system, where the flow would be maintained. The second was to replace the core credit flow, used FICO® Originations Solution which is powered by FICO Platform.
Over just six months, FICO worked with the Mibanco team to examine, adjust and migrate all the policies programmed into FICO Platform. Group policies were also added that could not be programmed in the past and by
When the pandemic arrived, Mibanco was able to react quickly by having a highly flexible originations solution in place. The risk team rescheduled and froze repayments for
Additionally, COVID forced Mibanco to adjust credit policies and the different scores it uses. Thanks to FICO Platform, Mibanco can make quick changes and assist its customers while ensuring that risk keeps within the company’s guidelines.
“Lenders want to expand their market to include more new borrowers, but this segment of applicants poses a significant challenge to a lender’s ability to assess character, credit risk and verify the credit destination,” said
For its achievements, Mibanco won a 2022 FICO® Decisions Award for financial inclusion.
“Mibanco did a great job optimizing their decisioning process to drive more automation,” said
Mibanco is the leading microfinance financial institution in
About the FICO® Decisions Awards
The FICO Decisions Awards recognize organizations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based upon measurable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology. The 2022 judges are:
Sidhartha Dash, research director atChartis
Paul Deall, head of risk, mortgages atWestpac (previous winner)
- Senthil Erulappan, director, product engineering for merchant, risk and collections at FIS
Armando Junior, general manager, risk and compliance at Dock (previous winner)
Sheila Leverone, chief marketing officer ateDriving (previous winner)
- Sibulelo Ncamani, head of operational risk and governance at Absa Bank (previous winner)
Graham Rand, operational researcher and editor of Impact
Dinesh Suresh, head, digital builds for consumer secured lending at OCBC Bank(previous winner)
The winners of the FICO Decisions Awards will be spotlighted at and win tickets to FICO® World 2022, the
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, manufacturing, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 120 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.
Learn more at www.fico.com.
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