“Path breaking” tool to enter the world of BFSI sector

Transform scenario of borrower assessment with Index Advisory’s Psychometric Test

by Shrutee K/DNS 

Mumbai, 2^nd September, 2016: These days when increasing number of banks and NBFCs are reeling under bad loans and stressed assets, consulting firm Index Advisory has developed a revolutionary technique to assess the borrower profile that could considerably reduce the credit risk borne by lenders. The Psychometric Test, as the technique is called by Index Advisory, will help the BFSI sector to do a socio-psychological analysis of borrowers, which will further enable them to make a better loan-risk assessment.

Mr. Yogesh Mariwala, Executive Director, Index Advisory, said: “Psychometric Test facilitated by us is empowering a wider spectrum of borrowers to create new avenues for income generation. At the same time, with such a fail-safe tool at hand to assess borrower profile, BFSI sector would have less inhibitions and more encouragement to disburse loans.”

Psychometric Test as a part of the credit analysis is fast becoming popular with banks and microfinance corporations across the globe, as it can better predict future behavior of borrowers, those with or without credit history. Psychometrics and other methods of alternatively assessing ability and willingness to repay loans can play an important role in closing the credit gap. In a country like India, a vast portion of the borrowers still remain credit hungry. Many borrowers without credit history, collateral or active bank account remain “unbankable” for lenders. Psychometric tests are able to map the honesty, intelligence, aptitude and ability of such borrowers, apart from the regular borrowers. It increases the scope and reliability of borrowers for the BFSI sector. Psychometric testing has been gaining currency abroad as well.

With more and more borrowers being encouraged to approach banks for loan, the great Indian growth story can become more inclusive, widespread and robust. From banks and NBFCs to microfinance institutions, from medium and small scale entrepreneurs to individuals, all stand to benefit from this unique borrower assessment technique.

About Index Advisory Pvt Ltd-Index advisory is the pioneer in the design of Psychometric tests for credit scoring.  By measuring various parameters like an intention to pay, risk taking abilities, stability, integrity, business acumen, etc. They help organizations decide if it can lend to a person or company. Medtronic, Arogya Finance, Kinara Capital, Electronica Finance, orb Energy, Satin Credit etc are some of the key clientele of Index advisory.

Psychometric test refers to an objective and standardized measure of a typical sample of behaviour, which is otherwise difficult to measure since the behaviour is unobserved and latent. A score on a well-constructed test is believed to measure a psychological construct such as achievement, personality, aptitude etc. Differences in test scores are thought to reflect individual differences in the construct the test is supposed to measure and are supposed to predict behaviour.

Index Advisory is a consulting firm, dedicated to helping organizations achieve high business performance. This is achieved through strategic, managerial and functional interventions. Using coaching and change management skills and the information/best practices gathered across industries, they strive for organization-wide improvements.

Index Advisory is headed by Mr. Yogesh Mariwalla and is passionate about taking on immense challenges that matter to clients. In its brief 6 year journey, Index Advisory could demonstrate value delivery through long duration engagements, as opposed to point consulting. It works with equal zeal in delivering value to its multi- national clients as well as start-ups. This diverse experience across sectors and organizational sizes helped Index Advisory in cross breeding best practices, understanding market dynamics and in building independent perspectives that benefit its clientele.