Psychometric Test Brings Credit Scores to Undeveloped Countries
In America, a credit score assesses a person’s ability to pay back a loan. We have numerous factors and databases that go into making this score, but other countries aren’t as fortunate.
As a result, a new test has emerged to give consumers in undeveloped countries a chance to borrow the money they need.
The Entrepreneurial Finance Lab’s test was originally developed as a doctoral project at Harvard. When MasterCard decided to hop on board with the project, it went to another level.
With this test, a company can assess a person’s ability to pay back a loan based on his mental state, not necessarily his past credit history. The test predicts future behavior based on answers to a series of specific yet simple questions.
This program is still in its infancy, but it gives hope to countries with weak, underdeveloped economies that may not have a way of assessing a person’s financial stability. Banks in 16 countries are already working on adapting this test to suit their needs, which could open doors for more than 70,000 needy small-business owners.
It may be the start of a great economic change for emerging markets in the years to come.