How might mPokket expand its credit scoring model to responsibly serve more first-time borrowers?

Introduction

To expand mPokket's credit scoring model to responsibly serve more first-time borrowers, we need to carefully analyze our current model, identify areas for improvement, and explore innovative approaches to assess creditworthiness. I'll outline a strategic plan to achieve this goal while maintaining responsible lending practices.

Step 1

Clarifying Questions (5 mins)

• Looking at mPokket's target audience, I'm thinking we're primarily focused on young adults and students. Could you confirm our current user demographics and if there are any specific segments we're looking to expand into?

Why it matters: Determines the direction of our credit scoring model expansion Expected answer: Primarily serving 18-25 year old students, looking to expand to young professionals Impact on approach: Would focus on incorporating employment and income data into the model

• Considering the nature of first-time borrowers, I'm assuming our current model heavily relies on alternative data sources. Can you share what types of data we currently use and any limitations we've identified?

Why it matters: Helps identify gaps in our current model and potential areas for expansion Expected answer: Currently using academic records, social media data, and device information Impact on approach: Would explore additional data sources like utility bill payments or rental history

• Given the goal of responsible lending, I'm curious about our current default rates and risk tolerance. What are our target metrics for defaults, and how do they compare to industry standards?

Why it matters: Establishes the balance between expansion and risk management Expected answer: Current default rate of 5%, aiming to maintain or reduce while expanding Impact on approach: Would focus on maintaining or improving risk assessment accuracy while increasing approval rates

• Considering the competitive landscape, I'm wondering about our market position and unique value proposition. How do we currently differentiate ourselves from other digital lenders targeting similar segments?

Why it matters: Helps align our credit scoring expansion with our overall business strategy Expected answer: Known for quick approvals and student-friendly terms, looking to maintain this edge Impact on approach: Would prioritize solutions that maintain or enhance our speed and accessibility