kariuki392/DataAnalysisProject27-Retail-Lending-Origination-Risk-Based-Pricing-Engine

Production-grade retail lending decisioning engine for Kenya's direct lenders. Dual credit scoring (Logistic Regression + XGBoost), CBK KESONIA-compliant pricing, alternative data integration (M-Pesa/Till/Remittances), dynamic product mix optimization, and 12-month revenue forecasting. 75K applicants. Regulatory-ready. # 🏦 Retail Lending Origination & Risk-Based Pricing Engine > **Production-Grade Direct Lending Decisioning Framework** > Dual Credit Scoring | CBK KESONIA Pricing | Alternative Data Integration | 75,000-Applicant Panel --- ## 📋 Executive Summary This flagship project constructs an **end-to-end automated loan decisioning engine** for Kenya's direct lending and fintech ecosystem. Grounded in **Central Bank of Kenya (CBK) Risk-Based Credit Pricing Model (RBCPM)** compliance, the engine ingests **traditional credit bureau (CRB) data** alongside **alternative mobile money signals** (M-Pesa velocity, Till/Paybill turnover, diaspora remittances) across three product tiers. **75,000 historical loan applicants** are scored using a **dual-model architecture**: - **Logistic Regression:** Interpretable, regulatory-auditable scorecard (WoE/IV-transformed features) - **XGBoost:** Non-linear risk detection capturing mobile money signal interactions Dynamic approval routing (Auto-Approve/Manual Review/Auto-Decline) is paired with **CBK KESONIA-compliant pricing** (APR = 8.75% baseline + 2.5% operational cost + 1.0% funds cost + dynamic risk premium K(PD)) and **product mix optimization** to maximize net interest income (NII) subject to portfolio risk caps (5.0% PD) and capital constraints (KES 100M/month). --- ## 🏗️ Architecture & Core Components ### **1. Synthetic Panel Data Engine** | Parameter | Value | Notes | |-----------|-------|-------| | **Total Applicants** | 75,000 | Historical loan applications | | **Vintage Periods** | Single snapshot | Current origination cohort | | **Product Mix** | 60% Mobile Micro, 25% Micro-SME, 15% Diaspora | Weighted by market prevalence | | **Default Rate** | ~8% | Historical 12-month performance label | **Key Features Generated:** - Monthly Income (KES) — lognormal by product (30K–500K range) - M-Pesa Inflow/Outflow (monthly velocity) - Till/Paybill Turnover (SME cash flow indicator) - Diaspora Remittance Inflow (monthly, diaspora prod …