1 Lending with alternative data Paul Gu Co-founder,

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Presentation transcript:

1 Lending with alternative data Paul Gu Co-founder,

2 ? The thin-file problem

“ Our results challenge the notion that young borrowers are bad borrowers. We show that young borrowers are among the least likely to experience a serious credit card default. - Federal Reserve Bank of Richmond

4 Which group is going to sign up more Risk level of borrower

Major in mathematics 3.86 GPA 2 years work experience Software engineer

6 What actually happens when you lend someone Probability of Paying You Back 83%+

Actual credit score distribution based on FICO (C) 2013 score distribution

r = time value of money

r = time value of money + defaults + volatility

Paying a non-risk free interest rate means you’re covering the cost of other people defaulting.

Ultimate Goal: Expand access, lower rates