Household Electricity Profile as Alternative Data for Credit Appraisal

Abstract

Credit appraisal tools has long taken interest of banking and financial industry, since it is their main business to disbursing loan, make profit from loan interest and keeping non-performing loan minimum. Since then, many researchers try to propose alternative data for credit risk analysis. This research proposed a method to profile electricity customer behavior in order to complement traditional credit-risk analysis data. Five parameters are proposed. Those parameters are representing customer behavior in electricity, which is payment order; purchasing power; power (kWh) usage; compliance, and residence occupancy. Based on our Proof of Concept (PoC) with one of State-Owned Bank, this method largely reduces their evaluation time of debtor from days to minutes.