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Silicon Valley Wants to Use Algorithms for Debt Collection

#artificialintelligence

Consumer debt, credit card debt, and personal loan debt are at all-time highs. Meanwhile, investors who purchase debt for cents on the dollar and then try to collect the whole amount, and the collection agencies they hire, are getting increasingly aggressive. One in four consumers contacted by debt collectors feels threatened, and most consumers say the calls persist even after requests to stop, according to a 2017 study by the Consumer Financial Protection Bureau. To borrowers who owe money, it's a living nightmare. To Ohad Samet, cofounder and CEO of TrueAccord, a San Francisco debt-collection startup that has raised nearly $30 million, it's a software problem.


AI applications for lending and loan management in Financial Industry

#artificialintelligence

"AI applications for lending and loan management Made companies Effective, Smarter & Customer-oriented" Loan Management is the important key division of banking and funding companies who are providing loans for users for financial needs. Historically, its purpose has continued to recognize the institution's gross loan risk, enhance profits on those chances--sometimes by selling loans in the developed market, and hedging--and recognizing and achieving audiences of opportunity. In opposition to traditional origination and balance risk-management purposes that seem only at exclusive sales or borrowers, CPM looks after the complete credit book. While lending and loan management is growing rapidly and there is a chance to grow Application fraud is a fast increasing problem around the system. Economic disaster has made increasing numbers of over-indebted people to deceive their criteria for credit.


Artificial Intelligence revolution in lending: Hype or reality? - The Economic Times

#artificialintelligence

By Ashwini Anand When virtually everyone claims to use "artificial intelligence", "big data" or "machine learning" to "disrupt"/ "revolutionize" one industry or the other, I would not blame you for being sceptical about the much-touted AI revolution in Fintech. But, before you throw the baby out with the bathwater, let us delve a little deeper and understand if there is a real problem in lending and if AI can help solve it. Is there really a problem in the banking system? Banks and financial institutions, with some notable exceptions, are struggling with bad loans. According to India Ratings the average Impaired Asset Ratio - the sum of gross NPAs and restructured advances (a measure of the stress on a lender's balance sheet) stands at 12% of advances and is slated to rise to 12.5%.


Millions of defaults threaten future of microfinance in India

The Japan Times

In February 2020, unaware the coronavirus pandemic was about to wipe out her livelihood, Arpita Das borrowed $2,300 to buy materials and equipment for her family fishing business in West Bengal, India. A few weeks later, demand for her prawns collapsed, leaving her unable to make the $180 monthly repayments to two microlenders. The 33-year-old mother of two, who had never missed a payment since she started borrowing three years earlier, is now living off the vegetables and grains she grows on a plot of land outside the home she shares with her husband and his parents. With the whole family out of work, they are unlikely to have any income unless she can borrow $1,400 for this year's prawn harvest. During India's initial three-month lockdown, one of Das' lenders would call her regularly to see how she was doing.


Banks need relief too, helping only borrowers will hamper next round of credit growth

#artificialintelligence

The six-month moratorium announced by the Reserve Bank of India to help borrowers who suffered due to the Covid-induced lockdown came to an end on 31 August. Many lenders had called upon the RBI not to extend the moratorium, arguing that it would lead to a spurt in NPAs while unduly benefitting borrowers who could repay loans. After the moratorium ended, a number of individual borrowers, hotel associations and real estate companies filed a petition before the Supreme Court, seeking an extension of the moratorium and waiver on interest payments charged by banks on instalments deferred during the moratorium period. The Supreme Court provided immediate relief to borrowers by extending the moratorium till 28 September. It also sought the government's views on the issue of waiver of interest on interest on loans, and the government said it had agreed to bear the cost of the interest on interest for MSME loans and personal loans up to Rs 2 crore.