Real-Time Decision-Making to Serve the Unbanked Poor in the Developing World

The World Bank estimated in 2015 that 60% of the world's poor earning less than USD2.00 a day do not have a bank account or are unbanked. A major impediment to serve the unbanked poor is the high cost of the process of distributing small loans and collecting repayments from barely literate borrowers. This process requires loan officers to meet the poor at their door step, making it a people-intensive process requiring frequent face-to-face interaction. Real-time decision-making is a solution to address the key challenge experienced by banks when serving the unbanked poor in the developing word. Our poster is drawn from two case examples: Banco Azteca, a bank in Mexico, and Equitas Holdings Limited that makes small amounts of loans to unbanked poor in India. We focus on an Azteca's automated decision support system to serve low income people ignored by banks in Mexico, and a real-time performance dashboard custom-built by Equitas to improve the productivity of loan officers. Our analysis suggests that real-time decision making cannot enable banks to scale their operations for achieving significant social impact unless the following conditions are met: process, application of real time data, user friendly interfaces, and leadership by top management.