Credit Assessment Methodlogy

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Moneymela's credit risk algorithm plays a crucial role in assessing the creditworthiness and eligibility of borrowers. The company has developed a credit rating score model that takes into account a range of parameters which includes; Credit history, Income and financial stability, loan purpose, Type of employment, stability of employment and credit utilization.

To enhance their chances of being approved for loans through Moneymela, borrowers are required to meet the following eligibility criteria:

  • The borrower should be at least 18 years of age
  • The Borrower must be a resident of India
  • Should possess valid identification proof, address proof, and signature proof as per the requirements specified by Moneymela.
  • The borrower must provide proof of income, which can be in the form of salary slips or income tax returns (ITR).
  • The borrower must have a valid Indian bank account.
  • The borrower should have a steady monthly income to ensure the repayment of the loan.

Borrowers are also required to upload the following documents, which will enable moneymela to verify the KYC and background of the borrower.

Documents required to be submitted by the borrowers-
1 Identity Proof/Date of Birth Proof (any one of the following) PAN Card
Adhaar Card
Voter ID
2 Address Proof (Present/Permanent) (any one of the following) Adhaar Card
Bank Statement
Voter ID
Electricity Bill (within last 3 months)
Post-paid Mobile Bill (Last Month)
3 Signature Proof (any one of the following) PAN Card
Signature verification from your bank
4 Photograph Passport size photograph (1 Copy)
5 Bank Details Scan copy of Cheque or Copy of the front page of pass book for details of Account No and IFSC Code.
Bank statement or pass book copy of Salary/operating account for last 6 Month.
6 Proof of Income Salaried – Salary Slip for Last 3 months
Self Employed – ITR for last 2 Years.
Any other document confirming income of the business of the borrower.

Moneymela takes several measures to conduct comprehensive background checks on borrowers, ensuring their legal status and mitigating risks. These measures include:

  • Willful Defaulter Check: Moneymela verifies whether the borrower is listed as a willful defaulter in the Reserve Bank of India (RBI) database.
  • Compliance with RBI Norms: Moneymela assesses the borrower's compliance with RBI norms regarding any previous defaults.
  • Legal Proceedings Check: Moneymela checks for any pending legal proceedings or suits against the borrower.
  • Physical Verification: Moneymela may conduct physical verification of the borrower as part of its due diligence process to ensure the authenticity of the borrower's identity and address.

Moneymela has partnered with credit bureaus such as Equifax and Highmark to access the borrower's credit history, which includes information about their past repayment behavior and creditworthiness.

Based on the analysis and verification of the borrower's documents and background checks, Moneymela assigns a final rating. This rating determines the applicable interest rate for the loan. A higher rating indicates a lower risk profile, leading to a lower interest rate, while a lower rating suggests a higher risk profile, potentially resulting in a higher interest rate. By offering personalized and competitive interest rates based on the borrower's rating, Moneymela aims to provide tailored loan terms that align with the individual's creditworthiness.

Once the borrower's eligibility is successfully verified and assessed, they will receive a loan sanction letter via their registered email ID. Before loan disbursal, the borrower needs to fulfill pre-disbursement compliances, such as signing the loan agreement and submitting an end-use certificate declaration. These steps ensure adherence to necessary procedures and documentation before the loan amount is disbursed.

Moneymela's comprehensive background checks, credit history analysis, and verification processes aim to ensure the integrity of the lending platform and provide suitable loan offers to borrowers based on their creditworthiness.