My Story @ Siol.net — Sneak Peak

I was honoured and excited to share my story for Siol.net. The interview is available here (in Slovenian). Sneak peak in English below.

More to follow… :)

Nina is employed by an American investment firm investing in alternative sources of funding, such as online loans for consumers and students. She is developing quantitative models for assessing credit risk of the online borrowers.

“We want to develop new technologies that will transform the current banking system and offer people better and cheaper financial services. Banks are often taking advantage of their customers’ trust to charge them high interest, credit and other servicing fees.”

According to Nina, when assessing borrowers’ creditworthiness, banks are mostly concerned about permanent employment, monthly inflow and age of the bank account. “The problem is that a large part of the population, for example young people, foreigners and socially deprived people therefore do not have access to loans. This issue can be solved with online loans. Everyone can apply for a loan through the online platform, and other users of the platform can lend a part of their savings to the online borrowers. So people who might not be eligible for a traditional bank loan can borrow. It can be a student loan, a car loan, or a kitchen repair loan. “

Online loans thus circumvent the bank, allowing more people gain access credit. However, as Nina says, new challenges also arise: “Since everyone can apply for a loan online, the risk of default is much higher. Therefore, we need much more advanced models for assessing credit risk, based on a large amount of additional information about the online borrower. For example, where and what a person is studying, how well they are doing in school, what kind of job opportunities they have, what cash inflows can they expect in the future, how many times they haven’t paid his bills, how many credit cards they have, where they live. We can connect the borrower’s region with unemployment rates, real estate prices, salary range at this geographic location … “