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Task3 Business Summary Report Formatted

The report outlines predictive insights indicating that customers under 30 with multiple missed payments and high credit utilization are at a significant risk of delinquency. It recommends a 6-week SMS outreach campaign targeting this demographic to potentially reduce 30-day delinquency rates by at least 10%. Ethical considerations include addressing potential bias, ensuring explainability, and maintaining responsible decision-making throughout the process.

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Ayush Kavariya
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171 views2 pages

Task3 Business Summary Report Formatted

The report outlines predictive insights indicating that customers under 30 with multiple missed payments and high credit utilization are at a significant risk of delinquency. It recommends a 6-week SMS outreach campaign targeting this demographic to potentially reduce 30-day delinquency rates by at least 10%. Ethical considerations include addressing potential bias, ensuring explainability, and maintaining responsible decision-making throughout the process.

Uploaded by

Ayush Kavariya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Business Summary Report: Predictive

Insights for Collections Strategy


1. Summary of Predictive Insights

Based on the EDA (Task 1) and the predictive modeling plan (Task 2), the following insights
were observed:

- Customers under 30 years old with two or more missed payments and credit utilization
above 50% show significantly higher risk of delinquency.
- High debt-to-income ratio (> 0.5) consistently correlates with late or missed payments.
- Customers with short account tenure (< 12 months) tend to have weaker repayment
behavior.

Key Insights Summary Table:

Key Insight Customer Segment Influencing Potential Impact


Variables

Customers with high Under 30 years old, Missed Payments, Targeted outreach
credit utilization 2+ missed Credit Utilization, could reduce 30-day
and frequent missed payments, high Age, Debt-to-Income delinquency rates
payments are at credit utilization (> Ratio by over 10% in this
highest risk of 50%) segment.
delinquency.

2. Recommendation Framework
Restated Insight:
Customers under 30 with 2+ missed payments and credit utilization above 50% are at
significantly high risk of delinquency.

Proposed Recommendation:
Launch a 6-week SMS outreach campaign targeting these customers to reduce 30-day
delinquency by at least 10%.

Specific:
Target customers under 30 with 2+ missed payments and high credit utilization.
Measurable:
Track reduction in 30-day delinquency; goal is a 10% decrease.

Actionable:
Use existing SMS infrastructure for outreach.

Relevant:
Aligns with Geldium’s goal to lower delinquency and improve repayment behavior.

Time-bound:
Campaign will run for 6 weeks.

Justification and Business Rationale:


This targeted campaign is simple, cost-effective, and data-backed. It directly reaches a high-
risk segment with an intervention that is easy to scale. By focusing on this group, Geldium
can achieve significant impact in reducing overall delinquency while maintaining a positive
customer experience.

3. Ethical and Responsible AI Considerations

- Potential Bias: The model may under-represent or misclassify certain demographic groups
if historical data is skewed (e.g., income or location-based bias). Fairness checks are
necessary.
- Explainability: Logistic regression provides interpretable coefficients, which makes it easy
to explain to business stakeholders how risk is determined.
- Responsible Decision-Making: Model outputs are reviewed by humans before action. The
SMS campaign is supportive, not punitive.
- Other Ethical Principles: Transparency is maintained through explainable features. Privacy
is ensured by using anonymized data. Ongoing monitoring ensures the model adapts to
changing customer behavior.

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