A new scoring model has been developed in Azerbaijan to assess the credit risk of individuals with no credit history. The assessment will be based on transactions made using their bank cards, Azericard Processing Center Deputy Director General Zakir Ahmadov said at an event organized by the Fintech Alliance of Turkic States (TÜRKFIN) in Baku.
Report quotes him as saying around 43% of Azerbaijan's population has an established credit history, while the rest have none for various reasons.
"However, these people have bank cards and use them to carry out various transactions. These transactions can provide us with sufficiently detailed information about their income, expenses and main spending patterns," Ahmadov said.
He noted that Azericard had implemented several projects in this area, the latest in partnership with Mastercard.
"Drawing on Mastercard's expertise and the data available to us, we have developed a model. It is already ready and will be presented to the public," the Azericard representative said.
In particular, the model assesses how insufficient funds in an account and the patterns of various transactions may affect a client's credit risk.
Ahmadov added that making transactions at night was one factor that could negatively affect a credit risk assessment.
"According to our analysis, people who make transactions at night may face a higher risk of falling behind on their loan repayments," he said.