Loan recommender system for microfinance loans: Increasing efficiency to assist growth

Abstract

A majority of the world's population does not have access to basic financial services. Therefore, financial inclusion is gaining attention from different governments, Non-governmental Organizations and private institutions. Microfinance Institutions (MFIs) have made a significant impact in the field of financial inclusion. But this impact is just the tip of the iceberg and these institutions need to grow exponentially and have efficient processes to have a more meaningful impact. In this article we discuss the design and implementation of a decision support system to help the MFIs achieve that target. We discuss an adaptive loan recommender system that assists the MFIs in making a more informed decision and help them grow with minimum resources. The article also discusses the implementation of this system in one MFI in India and the observed impact and limitations of the system. � 2011 Macmillan Publishers Ltd.