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Home Loan Collections Predictive Modeling

Objective

  • To put a centralized collections system in place for a large, geographically spread loan portfolio (comprising of Home, Vehicle, Education loans among others)
  • To first, determine node points of the collection process where predictive scorecards would serve best; and then, develop these scorecards and devise their implementation strategies.
  • To develop a suitable Collection MIS systems suite that enables effective monitoring and management.

Methodology

  • Based on the information – Consumer profile, transactional data and collection flow rates at various points of collections cycle (30dpd, 60dpd), optimum points for predictive scorecard implementation determined.
  • Delinquency prediction scorecard for “current portfolio” and payment prediction scorecard for “90+ days past due” portfolio developed.
  • Collection MIS suite comprising- Portfolio Pivot Analyzer tool, Credit Indicator Reports (CIR), Gross Flows (GF), vintage based month on books (MOB) MIS and other important collections management MIS developed and deployed.

Impact

  • A centralized collections system in place- powered by actionable MIS’s, pre-emptive scorecards that enable informed and data driven collection strategies implementation.
  • Write off losses down by 4% within 6 months of deployment. Impact in the range of $5 million.