GMG Peru

35% Increase Portfolio

EFL enabled a 35% increase in approvals with no change in default rate.

The Challenge

GMG, a leading electronics and appliances retailer in Peru, sought to expand its credit offering to lower and middle income customers. A lack of verifiable credit history in this segment, however, made objectively measuring risk and safely growing the organization’s portfolio impossible.

The Engagement

GMG  engaged EFL in 2013 to enhance credit analytics for  un-banked customers. After one year, 20 GMG stores had administered more than 7500 EFL assessments and opened more than 3000 new  credit accounts using the EFL score.

The Results

EFL’s Psychometrics psychometric scoring tool demonstrated the ability to effectively differentiate risk in GMG’s customer segment, enabling a 35% increase in credit accounts with no increase in default rate. Encouraged by these results, GMG decided to launch the EFL tool other Latin American markets, beginning with Guatemala.

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* Default reduction refers to the impact of removing the bottom two quintiles of EFL scorers from the borrowing population