Mizuho, SoftBank tap AI for consumer loan screening- Nikkei Asian Review

TOKYO — A consumer lender owned by SoftBank Group and Mizuho Bank on Monday launched a loan service that uses artificial intelligence to assess applicants’ repayment ability, targeting young customers via easier access to borrowing.

The service by J.Score, a 50-50 joint venture of SoftBank and the Mizuho Financial Group banking unit, computes an individual’s credit score via 18 questions regarding age and education, among others. 

An additional 140-150 optional questions on personality and hobbies enables more detailed assessments by determining spending habits and attitudes toward repayment as well as other characteristics.

Most screening processes for personal loans focus primarily on current income. Often this results in high interest rates and small loans for young individuals with lower incomes. By using AI to predict future income, J.Score aims to cultivate younger customers with great earning potential.

Loans will range from 100,000 yen to 10 million yen ($890 to $89,060), and will be capped at a third of an individual’s income. Interest rates will be between an annual 0.9% and 12%, some of the lowest levels in the industry, according to J.Score. The consumer finance company aims to bring the lending balance to over 500 billion yen over the next decade. J.Score runs its business with just several dozen employees and does not operate out of brick-and-mortar stores, with the aim of parlaying low business costs into lower interest rates.

That Mizuho lacks its own personal loan service worked to its advantage since the bank does not need to worry about two units competing against each other. But since its rival megabanks all have their own consumer finance units, Mizuho predicts it will be difficult for them to branch out into AI lending.


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