Loans That Improve Lives
Grupo Monge, one of the largest multinational retail companies in Central America, has used analytic decisioning to improve the way it evaluates and grants credit to its customers, especially those previously excluded from being able to access loans. By implementing FICO® Blaze Advisor® decision rules management system, Grupo Monge has expanded credit approvals by 10 percent, reduced expenses by 25 percent and reduced the time taken to assess the credit application by 30 percent.
Grupo Monge is a retail giant with more than 500 stores operating in Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador and Peru. The group has grown substantially by offering loans on consumer goods that can be paid off in affordable payments customized to customer conditions.
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We had Outgrown the In-store Model
Prior to the implementation of FICO Blaze Advisor, credit analysis was made in person at Grupo Monge businesses in a process that customers found long and complex. While there was great demand from consumers to purchase substantial items on credit such as motorcycles, electronics and whitegoods, the company’s growth was being hamstrung by inflexible systems.
“We understood that for our business to scale we needed a way to improve our ability to assess customers and create a unique approach in the market,” said Jose Gonzalez, operations manager at Grupo Monge. “We had obviously outgrown the model where you had a manager making loan application decisions in-store. What was needed was to move to a flexible, efficient and decentralized approach.”
Creating a Credit Decisions Brain
To achieve this, Grupo Monge needed to assess each consumer’s risk accurately. FICO worked with Grupo Monge to develop scorecards that would help them automate the process as the volume of credit applications increased. Rather than just one predictive model, Grupo Monge and FICO saw the opportunity to produce country-specific models that captured regional risk patterns.
These models are activated within FICO® Blaze Advisor®, an advanced tool for decision strategy management. FICO Blaze Advisor is now the “central brain” for the credit decision process in all countries. Grupo Monge’s risk management teams can develop, author and test their own policies, which has accelerated implementation of strategy changes and improvements.
For its achievements, Grupo Monge won a 2021 FICO® Decisions Award for financial inclusion.
By automating business rules and centralizing the analysis process, Grupo Monge has modernized its lending approach. People who previously could not afford big-ticket items in cash are now afforded credit to improve their lives. This financial inclusion drive has yielded benefits for both Grupo Monge and its customers.
“Grupo Monge has had a comprehensive and strategic approach to building credit opportunity across six countries,” said Prasanna Dhoré, Chief Data & Analytics and Innovation Officer at Equifax and one of the FICO Decisions Awards judges. “What they have managed to achieve in terms of financial inclusion is quite remarkable. They have coordinated the credit process across multiple areas of their company from sales to risk, customer service to finance.”