A smart new business loan for people with no credit | Shivani Siroya


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Translator: Ahmad Hamdan Auditor: Ahmad Altamimi How much do you need to know the person Before you feel comfortable and safe to agree to provide a loan to him? Let's say you want to lend $ 1,000 To the person sitting behind you two rows away. What do you need to know about this person Before you feel comfortable and safe? My mother came to the United States from India in her late thirties. She is a doctor in Brooklyn, She said she often allowed friends and neighbors to come to ask for health services, Whether they can pay right away or not.

I remember my mother meeting her patients in the grocery store Or on the footpath, Sometimes they pay her immediately Fare for previous dates. She was thanking them, And you ask them about the status of their families and their health. She loaned them because she trusted them. Most of us are like my mother. We lend to someone we know Or someone we live near. But most of us will not lend to unknown people So we know something about them. Banks, credit card companies and other financial institutions Do not know us personally, But they have a way to trust us, It is through creditworthiness points. Where creditworthiness points are issued By collecting and analyzing our general consumer credit data. Because of it, we have great accessibility For all the goods and services that we need, From getting electricity to buy a house, Or take risks and start a business.

But … There are 2.5 billion people around the world They do not have creditworthiness points. That is, a third of the world's population. They do not have eligibility The lack of official and public records of their consumption behavior No bank accounts, No credit records No social security numbers. And because they do not have creditworthiness They do not have access to credit or financial products Which can improve their lives. Because they are unreliable. So we wanted to find a way to build confidence And to provide credit or financial services to this group of 2.5 billion people So we created a mobile app Which is based on establishing creditworthiness points through their phone data, There are currently over a billion smartphones in emerging markets. The devices are used in the same way that we do. They send text messages to their friends, they search for directions, They browse the internet And they even conduct financial transactions. Over time, data is obtained from our phones, It provides a rich picture of people's lives. Consumers give us the right to disclose data We collect them through the program.

The data helps us understand the creditworthiness of people Like Jennifer, she is a small business owner in Nairobi, Kenya. Jennifer, 65, has been working in the kiosk for decades In the central business district. She has three children that she enrolled in a vocational school, She is also the leader of the local "Chama" party, Or savings groups. Jennifer’s food booth works well, She raises enough money to make ends meet every day. But it is financially insecure. It can be forced by any emergency on the debt.

She has no surplus income To improve her family’s living conditions, Or for emergencies, Or to invest in the development of its business. Jennifer’s options are limited if she wants a loan, She can get a small loan, But then she will need to form a group to help testify her credibility. However, the loan sizes will be very small And therefore it will not have any impact on her project, With an average income of $ 150. Whale loans are always an option. But with interest rates above 300 percent, They are considered financially risky. And because Jennifer does not have collateral or a credit record, She cannot go and ask for a loan from the bank. But one day, Her son persuaded her to install our software on her phone, And apply for a loan.

A smart new business loan for people with no credit | Shivani Siroya

Jennifer answered a few questions on her phone And she allowed us to reveal some important information on her phone. And this is what we found, Bad news first. Jennifer has a low savings budget and has no previous loan history. These factors are alone Sufficient to refuse the loan by traditional banks. But there was some important information that showed us A good and rich image of its capabilities. Such as, We saw that she regularly made phone calls to her family in Uganda. Information explained Four percent increase in the probability of payment Among those who regularly make phone calls to close people.

We can also see Although she is constantly roaming throughout the day. Their patterns of transmission are regular, It was either at home or at the food stall. Information showed an increase of six percent in probability of payment Among the regular clients Where they are most of the time. We also saw that she communicated a lot With many people during the day And it has a strong support network of allies. Our data appears That the number of people with more than 58 contact They are probably good borrowers. In the case of "Jennifer" I contacted 89 people This showed an increase of nine percent in the possibility of payment And that's just a few thousand different points Which we analyze to understand individual creditworthiness.

After analyzing all of these different points, We took the first risk We provided a loan to Jennifer. This type of data cannot be seen in documents Or even on any of the official financial records. However, the data confirmed the ability to guarantee confidence. By looking beyond income We can see that people are in emerging markets What appears to be apparent is risky and unpredictable In fact they are willing, and they have the ability to pay. Our credit score points helped us to provide 200,000 loans in Kenya Only during the past year. Our repayment rates are over 90 percent Which is, by the way, in line with the rates of repayment in conventional banks. With something as simple as a credit score, We give people the power to build their futures. Our customers used their loans to cover family expenses, Emergency situations, travel And invest again in developing their business.

They are now building better economic systems and societies Where more people can succeed. By using our product for the past two years, Jennifer managed to increase her savings by 60 percent. It also created two additional food stalls She is now planning to create her own restaurant. She is applying for a small business loan from a commercial bank, Because it now has the necessary credit history to demonstrate its financial ability to pay. I saw Jennifer in Nairobi last week, She told me how excited she was to start. And she said then, "It is only my son that I think I can succeed if I don't think it works for me." She lived all her life She believes that part of the world was not available to her Our mission now is to open the world to Jennifer.

In front of billions like "Jennifer" who deserve trust. thank you. (clap) .

License: Creative Commons