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November 18, 2011 3:26 pm
Watch out – an unqualified shrink may soon determine the size of your home loan. From next year loan officers at Standard Bank in 10 African countries will use computerised psychometric tests to help decide whether to lend to entrepreneurs.
The problem with these tests, which are also used in employment screening, is they rarely adjust for culture. Neuropsychologists know that when two applicants from the same place but with different backgrounds are asked a question, they can think the same thing but answer differently. So clinicians adjust their tests. Software does not.
If psychometric tests gain a foothold in the loan approval process, it will encourage “box-ticking” loans – of the sort that helped cause the financial crisis.
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