Part 6/12:
Research indicates that credit assessment plays a crucial role in wealth distribution and community well-being. Excluding segments from access to formal credit exposes them to exploitative informal lenders, resulting in cycles of debt and hardship.
Despite the importance of this task, the industry predominantly relies on rule-based systems—around 60%—over emerging, more sophisticated models. Common challenges include model interpretability, regulatory compliance, and the generalizability of models across diverse credit scenarios. These barriers have historically impeded widespread adoption of advanced AI models in credit evaluation.