A Japanese non-bank lender launched a loan service that uses artificial intelligence to assess applicants' repayment ability.
J.Score, a 50-50 joint venture of SoftBank and the Mizuho Financial Group banking unit, computes an individual's credit score via 18 questions regarding age and education, among others.
An additional 140-150 optional questions on personality and hobbies enables more detailed assessments by determining spending habits and attitudes toward repayment as well as other characteristics.
Frugal Overheads
Most screening processes for personal loans focus primarily on current income. Often this results in high interest rates and small loans for young individuals with lower incomes. By using artificial intelligence (AI) to predict future income, J.Score aims to cultivate younger customers with greater earning potential.
J.Score aims to bring the lending balance to over 500 billion yen over the next decade. The firm runs its business with just several dozen employees and does not operate out of brick-and-mortar stores, with the aim of utilising the low business costs into lower interest rates.
