In today’s evolving economy, the blue-collar gig workforce plays a vital role. However, accessing financial services and credit has often been challenging for these individuals due to limited credit history or exclusion from traditional credit systems. Enter KarmaScore, the proprietary credit scoring system developed by KarmaLife. This innovative tool utilises platform-provided work data and user-permissioned alternative data to evaluate credit risk. In this article, we will explore how KarmaScore is driving financial inclusion for India’s blue-collar workforce and revolutionising the gig platform space.
Unveiling KarmaScore: A Paradigm Shift in Credit Assessment
KarmaScore, designed exclusively for KarmaLife users, offers a transparent and consistent credit scoring system. It analyzes user interaction with KarmaLife’s financial products and their work behavior on partner platforms. Following are some of the components of the KarmaScore-
- Credit usage: The user’s utilization of credit and its management.
- Repayment behavior: The user’s track record of timely loan repayments.
- Consistent earnings: The user’s steady income and work patterns.
- Ratings: Feedback and performance ratings on the partner platform.
- Penalties: Any penalties or violations incurred during work engagements.
This holistic evaluation allows KarmaScore to accurately assess creditworthiness and support responsible lending practices.
KarmaScore’s Role and Game-Changing Potential
KarmaScore acts as a continuous risk assessment tool, enabling a swift 3-minute digital onboarding process and providing immediate access to credit. This empowers blue-collar workers by addressing their financial needs in a timely manner. Loans extended to “thin-file” or no-file workers based on KarmaScore have achieved an impressive 90% on-time repayment rate. This statistic demonstrates the effectiveness of KarmaScore in accurately assessing creditworthiness and supporting responsible lending practices. KarmaScore addresses the gap in traditional credit systems that exclude individuals with limited credit history or those operating outside the traditional banking framework. KarmaScore enables us to build risk based credit solutions where users can borrow based on their credit score, and repay loans in easy weekly installments. It also enables a platform to build and offer other fintech products like savings products, insurance, financial guidance as well as other curated solutions like training and upskilling. By leveraging work data, alternative data, and machine learning algorithms, KarmaScore promotes financial inclusion.
KarmaScore highlights KarmaLife’s commitment to the upliftment of the blue collar workforce. Through its inclusive and transparent approach, KarmaScore is driving positive change in the gig platform space, fostering economic empowerment and leveling the playing field.