In Agriculture last mile connect is critical. How do we ensure that the right kind of leadership and creditworthiness is determined using state of art psychometric profiling tools?

1. Profiling Creditworthy & Entrepreneurial Borrower using Psychometric tools

2. EcoDev
• A leading edge Knowledge Management & Advisory Company having its HQ in India since 2004.
• Its Mission – is to add value to enhance performance to clients working in Complex Diverse and Risk prone ecosystems.
• Sectoral expertise in – Agriculture Value Chain and Agribusiness, Health, Sanitation, and Nutrition.
• Having a pool of highly qualified, international experts.
• Implemented over 100 assignments in 15 countries since 2004
• Consulted with – World Bank, Asian Development Bank, IFAD, UNDP, JICA, DFID, KfW, GIZ, DANIDA etc.
• Government clients– Government of India, various State Government in India, Government of Bangladesh, Bhutan and Nepal

3. Current scenario
BORROWERS LENDERS
Inadequate articulation of
business proposal
Perception of high risk
profile
Lack of historical financial data &
financial discipline
Emphasis on collateral
Unavailability of equity cushion Perception of siphoning
Small ticket size of proposal Cumbersome contract
enforcement
Quick appraisal & faster release
of funds
Precise credit rating &
volumes in disbursement
Financing
Value Chain

4. Financial Institutions grapple with the twin concerns
 Is the borrower creditworthy?
How much loan the borrower can take without increasing risk default?
(Often the risks created with the ‘information drought’ leads to less financial inclusion by risk averse institutions)

5. The fact of the matter is that the appraisal often suffers from unreliable database
The need of the hour is to obtain reliable, quick & empirical evidence about the willingness to pay and ability to
pay irrespective of a proper credit history or collateral.
Our solution goes ‘beyond’ and ‘behind’ the obvious by uncovering the psychological make up of the borrower
with significant accuracy
Psychometric profiling offers invaluable & comprehensive picture of borrower’s creditworthiness
It ably supports existing credit assessment in a quantifiable manner

6. Why Psychometric Assessment?
• The advantages of psychometric assessment based lending are significant:
 opens up previously untapped markets to lenders
 reduces underwriting costs through inexpensive technology to evaluate borrowers.
• With improved predictive algorithms underwriting is likely to get more accurate.
• Enables reaching out more consumers with better suited products and improve credit risk. .
• Psychometric testing can lower default rates by 25–40 per cent without any banker supervision. The cost of the
assessment is 45 per cent of traditional assessment measures

7. (Change Agent/Champion)
LE (Trg on Entpr'ship) (Ideal) HE
HC HC
(Passive Dependance) (Leading by example & creative)
Financial check list by Funding Agency
Psychometric Profiling
(Laggard)
LE (Trg in FI/BP) HE
LC LC
Negative and resigned unhappiness (Inquisitive & willing to learn)
(Don't tell me to change, its my destiny))
Legend: LE Low on
Entrepreneurship
LC Low on
Creditworthiness
HE
High on
Entrepreneurship
HC
High on
Creditworthiness
FI
Financial
Inclusion
BP Business Planning
C
r
e
d
i
t
w
o
r
t
h
i
n
e
s
s
E n t r e p r e n e u r i s h i p
Theoretical construct of Small holder Farmer Entrepreneurship & Creditworthiness

8. EcoDev Solutions
• BXI estimates “entrepreneurial
capability” using psychometric tests.
• Classify candidates based on the score
as CHAMPION, MASTER & ROOKE
• Monitoring of progress done through
Business Plan with clear business
matrices
KEY DRIVERS FOR MSME SUCCESS
EcoDev SOLUTIONS
Strong Entrepreneurial
capability
Strong Credit
worthiness attributes
Business eXellence Index
(BXI)
Creditworthiness eXellence Index
(CXI)
 CXI profiles the borrower on various
psychological parameters that
influence his borrowing behaviour.
 It measures the attributes and
comes up with a picture of the
borrower with high degree of
accuracy.
BXI is measured through the following instrument(s)
o Locus of Control (LC)
o Self Efficacy (SE)
o Achievement Motivation (AM)
o Meta Cognition(MC)
o Passion for Work (PW)
o Need for Dominance (ND)
o Need for Inclusion (NI)
o Need for Control (NC)
o Need for Affection (NA)
CXI is measured through the following instrument(s)
o Conscientiousness
o Business Skills
o Ethics & Honesty
o Fluid Intelligence
o Extraversion
o Confidence
o Need for Achievement
o Locus of Control
o Passion for Work

9. Business Excellence Index(BXI) & Creditworthiness Excellence Index (CXI) helps Banks to
reduce Credit risk, increase the volume of lending & reduces transaction time
• What is BXI?
BXI tool identifies presence/absence of entrepreneurial traits in small holder farmers/micro
enterprisers and existing customers
It classifies the profiles in three categories viz., Rookie, Master and Champion
Non-threatening feedback is provided in both individual and group setting
Customised business plan is prepared through coaching and measurable metrices are
documented
A 3 step approach is followed in the preparation of the business plan
Step 1: Assessment of current knowledge & skill share
Step 2: Review of GTM strategy
Step 3: Evaluation of demand creation on market share

10. What is measured in CXI?
Creditworthiness Excellence Index(CXI) is an innovative tool that profiles
the borrower on various psychological parameters that influence his
borrowing behaviour. Modern research indicates that various traits and
attributes influence our spending pattern. These attributes also
determine if the borrower has the entrepreneurial qualities in him or
not. The CXI measures these attributes and comes up with a picture of
the borrower with high degree of accuracy.

11. What are these parameters of Creditworthiness?
 Conscientiousness
Conscientiousness implies being perfect in any assignment. Such individuals do believe in
hard work and planning. They are disciplines and organised in various tasks/projects that
they undertake. Being cautious is also one of the aspects of conscientiousness. Usually a
credible borrower is a very conscientious one and from that viewpoint we need to assess the
borrower on this attribute of personality
 Business Skills
To run any enterprise successfully one needs to have few business skills. Few of the
important and critical business skills are ability to plan and set goals, ability to motivate and
network with colleagues and customers, time management, team building and prudent fiscal
discipline.

12. Parameters of Creditworthiness
 Ethics & Honesty
While Business Skills denotes the ability present or absent in the borrower ethics and
honesty represents the willingness element of the personality. Our research indicates that
conscientiousness is the most accurate predictor of ethical and honest behaviour
 Fluid Intelligence
Fluid Intelligence as opposed to Crystalized Intelligence- a concept proposed by Cattell is the
ability to be flexible, adaptable in solving problems. These are the people who innovate and
think out of the box. In the Transactional Analysis framework, they have the “Child” mask.
Such fluid intelligence is an attribute of a successful entrepreneur.
 Extroversion
Extraverted person reflects assertiveness, optimism, drive, dominance and leadership. It also
indicates that such a profile is more likely to take risks. Now it needs to be determined if this
is moderate risk or foolhardy risk. Both have serious implications for creditworthiness.

13. Parameters of Creditworthiness
 Confidence
For starting any new venture, the key attribute needed is confidence. Confidence in oneself
as well as a strong belief that one can make a difference
 Need for Achievement
To achieve perfection and success in any enterprise is reflected in the need for achievement.
People with high degree of the need for achievement set for themselves goals that have a
stretch in it. Not very easy and also not unrealistic is the pattern for setting the goals. Such
people always focus on results – an essential attribute of entrepreneurs
 Locus of Control
People with internal locus of control always believe in their efforts to produce results. People
with external locus of control always take solace on factors such as luck or destiny to
rationalize their success or failure. People with internal locus of control are more likely to be
good in managing a business.

14. Parameters of Creditworthiness
 Passion for Work
Individuals with high degree for passion for work or self- driven. Their
intrinsic motivation is always at peak. They are also passionate in what they
do and they have a healthy dislike for failure.

15. The CXI Architecture
CONVENTIONAL
CREDIT SCORE
DATA
SURROGATE DATA
Social Data
Mobile based
Utilities Payment
Suppliers
Buyers
PSYCHOMETRIC
TEST DATA
Real time Transaction data
Peer Review
Customer Feedback
Social Media
Industry Trends
Conscientiousness
Business Skills
Ethics & Honesty
Fluid Intelligence
Extraversion
Confidence
Need for Achievement
Locus of Control
Passion for Work
Cash Flow
Liquidity Status
Asset valuation
BI
Analytics
Platform
Bank
MSME
CXI
Score
innovate.impact

16. Battery III Go/No go
Inclusion Control Affection
Achievement
Motivation
Locus of
Control
Meta
Cognition
Need for
Dominance
Passion for
work
Self Efficacy N_Ach Extroversion Aggreableness Conscienious
ness
Neuroticism Openess to
Experience
E 4 4 6 1.66 0 5 0 5 5 38 22 10 36 20 26 
W 5 0 3
E 3 3 4 1.3 1.5 4.5 1 5 4.75 36 23 6 36 21 30 
W 0* 0* 2
E 4 2* 8 1.3 1.3 3.75 0.5 3.66 2.5 36 22 4 25 11 24 
W 1 0 3
E 5 5 7 4.6 1.5 4 2.5 0.6 4 36 32 6 35 25 23 
W 2 6 2
E 7 3 4 3.6 1.75 3.25 3.33 2 3 36 18 1 32 23 22 
W 1 1 1
E 6 0* 5 1.3 1 1 1 0.5 1 36 25 3 32 31 30 
W 0 1 2
E 4 4 5 2.3 0.5 5 5 1.6 5 28 22 8 37 29 27 
W 1 0* 3
E 4 4 8 2.3 2.5 5 0.5 4.6 3.5 38 23 8 36 23 27 
W 7 5 6
E 4 4 5 3 2.5 4.5 0.5 4.6 4.75 37 17 16 34 30 25 
W 3 1 5
E 3 6 4 2.6 0.5 4.25 3.5 3.66 1.75 35 17 9 29 18 29 
W 3 4 4
E 2 4 1 4.6 0.5 4.25 0.5 5 4.25 40 21 1 30 28 26 
W 0 2 0
E 5 5 2 2.6 2.5 3 3 1.6 2.7 37 17 7 23 17 21 
W 0 7 1
Battery 1 Battery II Battery IV

17. The Process Flow
The methodology for arriving at the creditworthiness consists of the following three
steps:
• Interview with the borrower and his family and close associates (this helps get a
360-degree perspective)
• Administration of the questionnaire (through a tablet or paper pencil test). The
test takes around 60 minutes and is culture free. It can be administered to any
group and can be easily translated in the local language.
• Superimposition of the financial credit assessment data ( provided by the
bank/financial institution)
The final result is a numerical score with a clear go or no go for providing the loan.
innovate.impact

18. EcoDev’s Experiences
Senegal: Developing “Proxy Sales Force”among the
local entrepreneurs with Syngenta Seed Care, SSTP/
USAID.
Tanzania: Identification and capacity development of
local entrepreneurs, SACCO/ AMCO/ FO and
Processors in the Maize Value Chain for leasing of
agriculture mechanization solutions with AGRA,
Rockefeller Foundation
India: Identifying appropriate local entrepreneurs
as part of various enterprise development
program of various State Government.
Bangladesh: Identification and capacity
development of local entrepreneurs to develop
rural sales network of 25 leading agriculture
companies with USAID.

19. Our Proposition
• We can administer these tools to the existing borrowers and give the
profile report
• Prospective borrowers can be administered these tools and analysis
of their entrepreneurial abilities needed to succeed in their
businesses along with their creditworthiness profiling can be given
• We can help the borrowers with the planning of their business model
template that can be monitored QoQ basis

20. Thank you