Banking group Capitec has announced that advances in its credit affordability checking will allow it to offer unsecured loans at better rates – with some at the same rates as secured loans.<\/p>\n
The group said that the uupdate – which is “set to revolutionise lending in South Africa” – uses big data, multiple regression models and new machine learning techniques to accurately assess applicants\u2019 creditworthiness via a rigorous review of their unique financial behaviour.<\/p>\n
This will allow the bank to offer better credit offers and lower interest rates tailored to a person\u2019s needs and credit profile, it said.<\/p>\n
“As well as the traditional data points such as disposable income and cash inflow, new metrics include an applicant\u2019s spending and saving behaviour, lifestyle choices and income streams,” Capitec said.<\/p>\n
Lower risk applicants who “bank smartly” can qualify for unsecured loans of up to R250,000 over 84 months at interest rates as low as 12.9% or prime + 3.<\/p>\n
“We\u2019ve evolved our competitive credit offering to appeal to individuals who base their credit choices on the total loan amount, monthly instalment, and now, the lowest interest rate. By offering unsecured credit at an equivalent rate to secured credit, we\u2019ve opened up a fast, accessible means of securing credit without costly, admin-intensive processes,” said Capitec CEO, Gerrie Fourie.<\/p>\n
Fourie said that Capitec was committed to a “responsible approach to lending”, with the new credit granting strategy employing rigorous measures to ensure credit is only granted to those who can afford it.<\/p>\n