In Latin America, access to credit remains a major barrier for millions of people. Only a fraction of the population has access to formal banking services, while a large portion relies on informal methods to manage their finances. Microcredits, designed to support small entrepreneurs and families, have played a crucial role in closing this gap, but they face significant challenges such as high default rates, slow assessment processes, and a lack of credit information.

However, the arrival of innovative technologies, such as decision engines, is transforming the way financial institutions evaluate and grant credit. These tools not only optimize processes, but are also helping with access to credit in the region, marking the beginning of a new era for financial inclusion.

What are microcredits and why are they important?

Microcredits are low-value loans designed specifically for individuals or small businesses that do not have access to traditional financing. Often targeted at rural or low-income communities, these loans have enabled thousands of entrepreneurs to start or expand their economic activities, fostering local development and improving quality of life.

However, microcredits face two main challenges:

High delinquency rates:

According to the Coface 2024 survey, 51% of companies in Latin America reported late payments, a trend that affects the sustainability of the sector.

Inefficient credit evaluation:

Many institutions rely on manual methods or formal credit history, which excludes a large segment of the population without a history in traditional banks.

This is where 100% web-based, cloud-hosted decision engines have emerged as a disruptive solution to this problem, providing speed, accuracy and flexibility to credit assessment.

Cloud decision engines: the technology that transforms access to credit

A decision engine is a platform that automates the credit assessment process by analyzing multiple data sources and applying predefined rules. These tools allow the creditworthiness of applicants to be assessed quickly and without bias. Those hosted in the cloud do not require installation or licenses, and have the ability to scale according to the seasonality of the year, thus responding to the demand for applications without requiring any infrastructure changes.

What makes them different from a traditional credit score?

While traditional credit scoring relies on historical data such as previous payments and credit utilization, decision engines extend the analysis to alternative data sources, in fact the score can be one of them.

This includes:

Payment behavior in non-banking entities.

Credit bureaus.

Real-time analysis of the applicant's payment capacity.

Any other alternative source of information that lenders define.

Furthermore, its nature NoCode makes them accessible to any financial institution, allowing for quick configurations without the need for a specialized technical team, since it has a very easy-to-use graphical editor.

Key benefits of decision engines

Decision engines have proven to be essential to improving access to credit on several fronts:

Fast and scalable decisions:

They process large volumes of data in seconds, allowing for almost instant approval of loans. This is crucial in markets where speed can be a determining factor.

Expanded financial inclusion:

By incorporating alternative data, these engines allow people without a formal credit history to access financing. For example, a person with informal income can be evaluated based on their transaction flow on non-conventional platforms.

Risk mitigation:

Decision engines identify risk patterns by combining multiple data sources, avoiding over-indebtedness and detecting potential fraud.

Reduction of operating costs:

Automation not only speeds up processes, but also reduces the need for manual tasks, freeing up resources for other strategic areas.

Success stories in Latin America

Mexico: 

• "uFlow drives the success of “RappiCard” Improving the credit card application process. The decision engine uFlow, 100% web, cloud and NoCode, was implemented at RappiCard to automate and make credit evaluation processes more efficient without depending on the IT area. This has allowed RappiCard to evaluate applications in a matter of minutes, offering a fluid experience for its users.

Colombia:

• “Juancho te presta” and the digital credit revolution: uFlow transformed the digital loan offering of this Colombian fintech. Thanks to the Credit Decision Engine of uFlow, The company optimized its credit decisions, ensuring agile and reliable processes.

• “Muebles Jamar,” facilitating access to credit for the purchase of furniture: With uFlowMuebles Jamar has automated its credit evaluation process, allowing its clients to access financing in a fast and personalized way. The decision engine, by incorporating predictive models, adjusts credit limits and conditions to the needs of each client, strengthening their experience and expanding the user base.

• “RappiPay” increases its efficiency with uFlow to improve access to credit: RappiPay strengthened its service thanks to the decision engine uFlow, which made it possible to automate and streamline the credit evaluation process. This provided users with quick and easy access to their credit card, improving the customer experience and strengthening financial inclusion.

The vision of uFlow: collaborate with access to credit

En uFlowOur purpose is to democratize and enhance access to technological services (SaaS) in the financial field, driving growth in the credit sector in Latin America. Our 100% cloud and NoCode decision engine not only speeds up credit assessment, but also opens the door for lending companies to new market segments, especially those historically unbanked.

In addition, institutions can offer customized financial products, increasing customer satisfaction and reducing associated risks.

Towards the future: microcredits as catalysts for development

Technological transformation and decision engines are marking a turning point in access to credit. In a world where financial inclusion is more relevant than ever, these technologies are helping to build a fairer and more dynamic ecosystem.

The future is promising: as more institutions adopt decision engines, millions of people will have the opportunity to improve their quality of life, ushering in a new era for economic development in the region.

Schedule a demo today!

Do you want to know how our decision engine can transform your credit evaluation processes and open new opportunities for your business? Schedule a demo now and discover how uFlow It may be the technological ally you need. Schedule here