Yes Bank taps AI to directly offer small loans to students

Yes Bank has partnered with fintech startups like Redcarpetup, Anytime Loans and FRS Labs among few others to adopt innovative technology based solutions for various businesses, such as lending, anti-fraud detection and easier customer onboarding processes.

These are three of the 10 startups that were part of the bank’s accelerator programme and are now in various stages of working with the lender.

“Looking at the innovations happening in the world of banking, partnership is the best way to go forward. While we can bring in scale, these entities can bring in latest technology,” said a Yes Bank spokesperson. “There is no need for us to create factories of back office for such innovations anymore.”

Redcarpetup will allow the bank to lend to students, which is something banks have never done before. The technology company has identified about 100 colleges in the National Capital Region and underwrites applicants on the basis of the college, the type of course, their education background and their social circle.

“We don’t give cash into their accounts directly; rather, we help them buy products they otherwise cannot afford,” said Sandeep Srinivas, co-founder of Redcarpetup. “They pay back over a one month to nine months tenure in smaller installments through their internship earnings, by giving tuition or pocket money.”

Anytime Loans is an automated P2P lending platform that uses artificial intelligence to read facial features and feed it into a predictive model that determines the borrower’s propensity to default. The company has disbursed Rs 68 crore over the last 30 months to 38,700 entities for personal loans, business loans and education loans. Its gross defaults are at a low 0.6 per cent.

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“We have a supply commitment of Rs 16 crore from different lenders. Now with the integration with Yes Bank, we have an additional Rs 6 crore for both personal loans and MSMEs,” said K K Jain, founder of Anytime Loans.

FRS Labs is working with Yes Bank to allow its customers open bank accounts from the comfort of their homes. While various banks allow customers to open accounts remotely through selfies, FRS Labs detects the picture, reads facial features, checks for liveliness of the applicant and matches it with other databases to detect fraudulent applicants.

“For us, these help get new customers, more data points and those feed into our larger product portfolio. We are creating a pipeline for the future through these partnerships,” said the Yes Bank spokesperson. “These are also very small amounts of money for the bank but help us test the waters easily.”

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