SINGAPORE - If someone cut into your queue at the cashier in a supermarket, what would you do?
Answers to psychometric questions like this will help moneylender Minterest predict a borrower's behaviour, assess the risk in offering them a loan without collateral - and maybe even slash their interest rate by half.
The firm is one of six which will be issued new moneylending licences next year to pilot their own unique business models, the Ministry of Law (MinLaw) announced on Tuesday (Dec 11).
It is the first time in six years that MinLaw is issuing new moneylending licences since a moratorium was imposed in 2012.
The one-time lifting of the moratorium is part of an initiative to better protect borrowers through business-led improvements. The new models include more comprehensive use of data to assess creditworthiness, using digitalised processes to lower cost and giving better terms to those who repay their loans early or on time, MinLaw said.
The other firms to be issued licences are Credit 21, Dey and Quick Credit which can operate up to four outlets each. IFS Capital, Xingang Investment and Minterest will be allowed to operate one outlet each.
All six firms have paid-up capital of at least $1 million and demonstrated a track record in providing consumer credit, whether in licensed moneylending or in other sectors of consumer credit, said MinLaw.
Under the Moneylenders Act, licensed moneylenders have to cap their monthly interest rate at 4 per cent.
Mr Ronnie Chia, chief operating officer of Minterest, said that his firm will be asking psychometric questions to gauge creditworthiness as part of its business model.
Borrowers who obtain a good credit score could see their interest rate cut by half.
"We do not want to be the traditional moneylender where people go to as a last resort," he said. "We want to be a true alternative to financial institutions. Using technology and data to assess credit risk, we want to create dynamic pricing and pricing that is applicable to the individual."
With mobile applications changing the face of moneylending, they could provide a " safe, secure and seamless experience" where people key in minimal information like their names and NRIC numbers and firms access their data through a government site like MyInfo, Mr Chia said.
Borrowers could log in to the mobile app using their Facebook accounts to find out how much they can borrow and the rate of interest.
"If they don't like our rate, they don't have to make the trip to our office," added Mr Chia. "This gives borrowers the freedom and ease to shop around for rates."
MinLaw said there are currently 162 moneylending outlets in Singapore. The new licensees will be allowed to operate for up to two years from next year, after which MinLaw will evaluate the results of the pilot and consider options for refining the moneylending regulatory regime.