Essays on rational absurdity of banking
How lenders assess borrowers, deal with uncertainty, and make credit decisions under imperfect information.
Why Indian bankers rely on the current ratio for borrower liquidity assessment
— and why it consistently misleads. A practical guide to reading liquidity
quality in SME and MSME lending.
Bias is an inherent human tendency, and recognising and minimising it requires deliberate effort. No matter how advanced the financial models or how experienced the analysts, Credit Risk decisions are inevitably influenced by personal experiences and context. The challenge lies in identifying when this reliance on past-experience crosses the line into bias.
Open Credit Enablement Network (OCEN) and the Unified Lending Interface (ULI) are designed to transform the lending landscape by making credit more accessible and streamlined for underserved segments. But how do they differ, and what unique roles do they play in enhancing India’s digital credit ecosystem?
Lenders—Banks, NBFCs, or FinTechs—face the classic ‘Knapsack Problem’ while trying to create an optimal SME lending distribution structure. Each channel mix—branches, digital, phygital, own, agents, co-lending—brings its own costs and benefits, with varying considerations of scale, risk appetite, resources, and practicality specific to each lender. These essential considerations can help bring clarity to your distribution strategy.