The current credit market has evolved from money lenders to banks to a new, tech-fueled credit environment. Artificial Intelligence (AI) and Machine Learning (ML) bots are making credit decisions without human intervention. Essentially, credit is based on a promise of repayment and the anticipation of return in the form of interest.
While most forms of credit are well-regulated, including credit cards and bank loans, there is still an unexplored jungle with loan sharks, payday lenders, and pawnshops. Dubious tactics and lenient regulations have harassed numerous consumers who have approached such lenders not out of choice but for survival. ‘Morality’ aside, these types of lenders still play a crucial role in the credit system by fulfilling their borrowers’ immediate requirement; they target consumers on the fringes of the formal credit market—those that credit reporting institutions have written off.
Rise of BNPL
The expanding middle-class …