Poor consumers in credit-scarce economies are often unable to provide essential documentation for loans, rendering them vulnerable to financial shocks and limiting access to credit.
Predictive cash flow modeling (PCM) offers a solution by using statistical models to forecast income and expenses, helping lenders assess the correct loan sizes and risks.
While not a novel concept, PCM has yet to be implemented extensively in personal finance, despite its successful use in commercial real estate and microfinance sectors.
Access to credit is crucial for improving the quality of life for low-income consumers, yet the lack of it remains a significant barrier to overcoming poverty.
#credit-access #predictive-cash-flow-modeling #povertyalleviation #microfinance #financial-inclusion
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