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How we assess our borrowers

At KoinWorks we seek to improve our customer experience while delivering the best underwriting quality. This is why our borrower assessments are done through multiple channels to do cross verifications, and continuous improvements on our machine algorithm.

We look at several data points:

  • The business’ financials
  • Its supporting documentations
  • The applicant’s financial track record
  • Its online presence
  • The brand’s reputation and interaction with customers
  • The owner’s social media connections
  • Platform partnerships
  • Third party vendors
  • Logic checks

Check & Balance (select & audit cases)

  • Phone interview
  • Partner checks
  • Site visits

Other Assessments

  • Industry trends
  • KoinWorks’ loan portfolio

Our loan assessment is currently done through both manual assessment and machine algorithm. We continuously make gradual improvements to our machine algorithm and automate more of the processes. Below we list some of the important aspects of our assessments:

  • We assess our borrower’s character through multiple means. Our assessment focuses on selecting a responsible and capable borrower. It is done by analyzing their on-site behavior, association scoring, business reputation, credit history, as well as other factors.
  • We look at a borrower’s finances to assess whether the borrower can afford his loans’ repayments. We simulate this under normal conditions and during a hypothetical time if an adverse situation occurs in the business or the industry.
  • We verify the data that the borrowers submitted in their application. This includes their identities, locations, business and personal finances, capabilities, and others. We do this by cross verifications, through public sources as well as third parties and by random physical audit.
  • We look at the business’ ability to operate. Growth, stability, reputation and track record play significant roles in the scoring. We also look at the industry condition and adjustments to our total loan portfolio.

We attempt to include all aspects of our loan assessment in every application, and we regularly add additional sources of data to improve our quality. However, information is often not perfect and it is even more so in Indonesia, thus we can only make the assessments with the available data.

To illustrate, close to 80% of Indonesians are categorized as underbanked or unbanked. Thus this portion of the population would have minimal or no credit history. As it is our mission to expand financial service to a wider reach of people, we will still process applicants without credit history as we make alternative assessments to supplement the lack of a credit history.