EFL enabled a 35% increase in approvals with no change in default rate.
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.
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.
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.Download Full Case Study
* Default reduction refers to the impact of removing the bottom two quintiles of EFL scorers from the borrowing population