In an ideal world, good begets good. Good deeds are lauded, and good behaviour is rewarded. Lending often works the same way. Borrowers with high credit scores are rewarded with low-interest rates, and conversely, those with low credit scores must pay higher interest on their loans.

This is a rather simplistic explanation of risk-based pricing, i.e. a process by which lenders offer different interest rates to different borrowers based on their creditworthiness. Aside from their credit scores, this may also involve assessing the borrower’s employment status, current debt, if any, assets, and so on. As a result, all borrowers for a single credit product will not be offered the same terms and rates.

The concept is by no means new – back in 2018, then deputy governor of the Reserve Bank of India, N S Vishwanathan, said, “Risk-based pricing of loans would need fair assessment and understanding of the risk involved, rather than merely relying on collateral and/or guarantees obtained from stakeholders including equity holders. Banks should charge interest rates that are commensurate with the risk involved in the projects that are being financed.”

What are the benefits of risk-based pricing of loans?

• First and foremost, risk-based pricing models offer an extra layer of protection for
  financial institutions lending to non-prime borrower cohorts.
• Flexible risk pricing models allow lenders to set interest rates that align with their
  financial goals. The financial security offered by risk pricing gives the lender more leeway
  for product and process innovation.

Also Read: How will generative AI advance embedded lending

• Research has shown that risk-based pricing can improve loan performance by bringing
  down delinquency rates.
• Risk-based pricing offers lenders the ability to tailor loan rates and terms so that they
  can lend to more borrowers, even if they don’t have the required credit scores and
  history. The higher risk level is offset by the higher interest rates, and subprime
  borrowers have a shot at accessing the credit they need.

Even as recently as 2016, risk-based pricing was almost an alien concept in India. Less than a decade on, most leading lenders are on their way to working with these pricing models.  It wouldn’t be a stretch to say that the rise of risk-based pricing has a lot to do with credit expansion to thin-file and new-to-credit (NTC) customers in recent years – 35 million borrowers opted for their first credit product in 2021, and well over 30 million did the same in the following year.

The rise of alternate data-driven underwriting is helping lenders fine-tune their scoring models by adding depth and texture to existing data sources. This adds further nuance to traditional indicators and, hence, enables progressive, risk-based bucketing of borrower cohorts and dynamic pricing.

As lending goes beyond typical borrowers with strong credit histories and high scores, lenders face the challenge of enabling access while protecting their business interests – and risk-based pricing comes in as a win-win in this situation. With the Reserve Bank of India’s recent move to increase risk weights for unsecured loans, lenders must focus heavily on pricing risk accurately while ensuring adequate risk capital in their books.

The growth of risk-based pricing has for long been a slow burn, but all signs point to it getting into its stride sooner rather than later.

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Tokyo-based e-commerce enabler AnyMind Group has appointed Tae Woo (Ted) Kim as Country Manager (Korea) and Mayi Baviera as Country Manager (the Philippines).

Baviera replaces Siwat Vilassakdanont, former Country Manager for the Philippines. Vilassakdanont is now Managing Director (Thailand and the Philippines).

In addition, the company announced the reappointment of Punsak Limvatanayingyong, former Country Manager of Thailand for AnyMind Group, as Managing Director (Creator Growth).

Also Read: AnyMind Group agrees to acquire Indonesian e-commerce enabler DDI

According to Co-Founder and CEO Kosuke Sogo, the appointments were made to enhance AnyMind Group’s collective experience and strengthen its focus across its leadership team as the company prepares for a new growth stage. “We are now at a key moment of opportunity where the e-commerce and marketing industries continue to develop, and new technologies promise to transform businesses of all sizes. We want to lead this generational transformation and continue to advance a borderless world where anyone can easily do business through the internet.”

As the Country Head, Kim will lead AnyMind Group’s business and operations in Korea. He was most recently Regional Director for Korean Clients at data, artificial intelligence and technology transformation company ADA. Before ADA, he held roles in Google, Microsoft and Twitter.

AnyMind Group, which entered the Korean market in November 2023, recently partnered with creator management company Treasure Hunter to provide marketers and businesses access to an immediate pool of influencers and content creators in the republic.

Baviera was most recently Country Director for the Philippines at ADA. Before ADA, she held leadership roles at Cheil and Digital FCB Manila. Similar to Kim, Baviera will be responsible for AnyMind Group’s business and operations in the Philippines.

Vilassakdanont will be responsible for AnyMind’s business and operations in Thailand and will continue to oversee the Philippines market. Vilassakdanont joined the group in March 2019 following the acquisition of Moindy, where he was Managing Partner. He has a background in investment and entrepreneurship, with Executive Director and Partner roles in Trinity Securities, ARK Investments and Merrill Lynch. He also co-founded various startups, including WXYX and Delicious.

Limvatanayingyong, who joined AnyMind Group in March 2019 through the acquisition of Moindy, started in 2004, marketing independent music labels and musicians’ music through digital platforms. Moindy became Thailand’s first YouTube multi-channel network in 2014 before its acquisition by TV Thunder Public Company Limited in 2017. After AnyMind’s acquisition in 2019, Moindy was merged into AnyMind’s Creator Growth business, which provides various offerings to creators, including brand collaborations, content monetisation and music distribution across different platforms, growth consultation and strategy, the creation of private-label brands and merchandise for creators.

Also Read: How AnyMind Group achieved profitability through its approach to human resource and leadership

Founded in 2016 in Singapore by Kosuke Sogo and Otohiko Kozutsumi, AnyMind Group offers software and solutions for end-to-end commerce enablement in the business supply chain. It operates across Southeast Asia, East Asia, India, and the Middle East.

Last month, the group announced its expansion into Saudi Arabia by opening an office in Riyadh.

Early last year, the firm made its public debut on the Tokyo Stock Exchange Growth market.

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Traditionally, waste-to-energy solutions were deemed viable only for cities with low populations. Australian startup Wildfire Energy is set to change this perception as well as the waste-to-energy landscape with its cutting-edge gasification technology. The vision is to eliminate landfills by turning residual wastes into renewable energy and hydrogen.

“Global solid waste generation is over 2 billion tonnes annually, and landfills are responsible for over 5 per cent of global greenhouse gas emissions. We offer a solution that converts waste into electricity and hydrogen with net negative carbon emissions,” according to Jamie Roodenrys, General Manager (Strategic Partnerships).

Also Read: Hydrexia enables users to store and transport hydrogen more economically with less space

Founded by Greg Perkins, Denis Doucet, and Grant Bollert, Wildfire Energy has developed modular plants which can be rapidly deployed and used to convert biomass and waste into renewable energy products at low cost. The solutions are suitable for industrial decarbonisation and improving waste management in outer urban, regional and remote communities, where landfill is currently the only option.

Wildfire Energy focuses on recycling a wide array of waste, from plastics and biomass to electronics. The startup aims to salvage materials that are challenging to recycle conventionally, offering a solution to waste-related environmental issues.

Wildfire Energy, a winner of last year’s Petronas FutureTech 3.0 programme, is currently on the cusp of realising its vision; it is gearing up to build its first full-scale project, processing approximately 45,000 tonnes of waste annually in Brisbane next year.

Also Read: How to navigate the investment opportunity in climate tech sector

The heart of Wildfire Energy’s technology lies in Moving Injection Horizontal Gasification (MIHG), a process that diverges from traditional incineration. Operating in a low-energy, low-oxygen state, the technology converts waste back into its constituent gases, producing synthetic gas (syngas) with about 40 per cent hydrogen content. This breakthrough enables the startup to harness energy from waste materials that would otherwise end up in landfills or incinerated.

The gasification process addresses waste management issues and provides a commercial model capable of cleaning the environment. The resulting energy products have the potential to decarbonise industries such as energy, waste, and transport. The main products generated by the process include synthesis gas, electricity, hydrogen, and heat. The synthesis gas, containing about 40 per cent hydrogen, can be utilised to generate electricity, power vehicles, and decarbonise various industries.

“We want to take the waste that otherwise gets dumped in the ground, and we’ll convert that into useful products,” adds Roodenrys.

Additionally, the byproducts, such as slag from inert materials like aluminium and steel, find valuable applications in construction, further adding to the environmentally friendly outcomes of the process.

While the technology seems revolutionary, the key question remains: is it cost-effective? “Our innovative gasification technology presents a scalable and economically viable solution. Unlike traditional waste-to-energy models that require large populations to be economically feasible, Wildfire Energy’s technology thrives in smaller cities and towns,” claims Roodenrys.

The startup is currently in the development stage, operating a pilot plant in Brisbane and collaborating with industry players to analyse outcomes. The upcoming full-scale plant in Brisbane, with a projected cost of US$50 million, is expected to secure 100 per cent funding by May next year.

Last September, Wildfire Energy partnered with Naturgy Innovahub to develop its MIHG technology to produce hydrogen from a range of residual wastes, such as municipal solid waste, and agricultural residues, such as wheat straw.

Also Read: On the precipice of energy transition

Wildfire Energy’s approach involves a build, own, and operate model for the initial project. However, future projects may adopt a build-and-operate transfer model, allowing clients to take ownership after a demonstration period. The ultimate goal is to deliver numerous projects worldwide under license agreements, contributing to a global shift towards sustainable waste management.

As the world grapples with environmental challenges, Wildfire Energy’s innovative technology offers a beacon of hope, transforming waste into a valuable resource and paving the way for a greener and more sustainable future.

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