Bajaj Finance, the Non Banking Finance company from the Bajaj Group led by Sanjeev Bajaj, one of the Technology Savvy CEOs has mad significant improvement in origination and underwriting processes by investing in technology, using information from CIBIL and creating a dedicated risk analytics unit which has enhanced its risk management capabilities.
The comprehensive database available with CIBIL Credit Bureau has allowed finance players to conduct sound underwriting. Pilot lending in rural areas is satisfactory and interestingly ~50% of BAF’s rural customers are part of CIBIL database.
The good news is that most of the retail lending in this cycle (2010-13) has occurred in the secured segment and credit bureau CIBIL has proven effective in limiting defaults. However, credit losses for banks in retail are close to zero and can only go up.
