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Strategic Decision Making Of Micro-Lenders: An Innovative Business Model For Risk Management

Table 1:

Features Proposed System Payday Loans Consumer Support Platforms Banks’ Online Credit Services
Loan Features Depends on the contract between lender and retailersAverage scale (1000TL-10000TL) 100$-5000$ 2000$-35000$ 1000TL-25000TL
Application Process Inputting ID and verification through MERNIS Online application form Application process Online application(Available for bank’s clients)
Inputting requested loan amount Directing client to lenders Inputting requested loan amount Contact confirmation
Fraud detection (Psychometrics for high-risks) Loan options Evaluation Transfer of money to the bank account
Evaluation (Credit Scoring) Evaluation Approve/RejectLoan options (Payback period)
Approve/RejectLoan options (Payback period) Approve/Reject Using loan directly at the time of shopping
Using loan directly at the time of shopping Money is transferred to bank account Money is transferred to bank account
Credit Decision Process 3-4 minutes In-store credit (10-15 minutes) Maximum 48 hours 5 minutes
Instant Decision-Making Yes Yes Varies among different systems Yes
Maximum Payment Period 12-36 Months 14-30 Days /12-36 Months 12-26 Months/3-5 Years 3-48 Months
Requirements for Credit Application ID Pay roll Mobile phone number *Requires becoming that particular bank’s client
Mobile for number Additional proof of income Occupational Information
Proof of Income No Yes No No
Occupational Status No Yes (Most systems require being employed for the last 6 months Yes No
Credit Scoring Yes Varies among different systemsMost systems use FICO Score Varies Most systems depends on Credit Bureau data Yes
Bank Account Information No Yes Yes *Requires becoming that particular bank’s client
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