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

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


How much do you need
to know about a person before you’d feel comfortable
making a loan? Suppose you wanted to lend 1,000 dollars to the person sitting two rows behind you. What would you need to know
about that person before you’d feel comfortable? My mom came to the US from India
in her late thirties. She’s a doctor in Brooklyn, and she often lets friends and neighbors
come to see her for health services, whether they can pay right away or not. I remember running into her patients
with her at the grocery store or on the sidewalk, and sometimes they would come
and pay her right on the spot for previous appointments. She would thank them, and ask them about their families
and their health. She gave them credit
because she trusted them. Most of us are like my mom. We would give credit to someone we know or that we live next to. But most of us are probably not
going to lend to a stranger unless we know a little
something about them. Banks, credit card companies
and other financial institutions don’t know us on a personal level, but they do have a way of trusting us, and that’s through our credit scores. Our credit scores have been created through an aggregation and analysis
of our public consumer credit data. And because of them, we have
pretty much easy access to all of the goods
and services that we need, from getting electricity to buying a home, or taking a risk and starting a business. But … there are 2.5 billion people
around the world that don’t have a credit score. That’s a third of the world’s population. They don’t have a score because there are no formal
public records on them — no bank accounts, no credit histories and no social security numbers. And because they don’t have a score, they don’t have access
to the credit or financial products that can improve their lives. They are not trusted. So we wanted to find a way to build trust and to open up financial access
for these 2.5 billion. So we created a mobile application that builds credit scores for them
using mobile data. There are currently over one billion
smartphones in emerging markets. And people are using them
the same way that we do. They’re texting their friends,
they’re looking up directions, they’re browsing the Internet and they’re even making
financial transactions. Over time, this data is getting
captured on our phones, and it provides a really rich picture
of a person’s life. Our customers give us access to this data and we capture it
through our mobile application. It helps us understand
the creditworthiness of people like Jenipher,
a small-business owner in Nairobi, Kenya. Jenipher is 65 years old, and for decades
has been running a food stall in the central business district. She has three sons who she put
through vocational school, and she’s also the leader
of her local chama, or savings group. Jenipher’s food stall does well. She makes just enough every day
to cover her expenses. But she’s not financially secure. Any emergency could force her into debt. And she has no discretionary income to improve her family’s way of living, for emergencies, or for investing
into growing her business. If Jenipher wants credit,
her options are limited. She could get a microloan, but she’d have to form a group
that could help vouch for her credibility. And even then, the loan sizes
would be way too small to really have an impact on her business, averaging around 150 dollars. Loan sharks are always an option, but with interest rates
that are well above 300 percent, they’re financially risky. And because Jenipher doesn’t have
collateral or a credit history, she can’t walk into a bank
and ask for a business loan. But one day, Jenipher’s son convinced her
to download our application and apply for a loan. Jenipher answered a few
questions on her phone and she gave us access to a few
key data points on her device. And here’s what we saw. So, bad news first. Jenipher had a low savings balance
and no previous loan history. These are factors that would have thrown up
a red flag to a traditional bank. But there were other points
in her history that showed us a much richer picture of her potential. So for one, we saw that she made regular
phone calls to her family in Uganda. Well, it turns out that the data shows a four percent increase in repayment among people who consistently
communicate with a few close contacts. We could also see that though she traveled
around a lot throughout the day, she actually had pretty
regular travel patterns, and she was either at home
or at her food stall. And the data shows
a six percent increase in repayment among customers who are consistent with where they spend most of their time. We could also see
that she communicated a lot with many different people
throughout the day and that she had a strong support network. Our data shows that people who communicate
with more than 58 different contacts tend to be more likely
to be good borrowers. In Jenipher’s case, she communicated
with 89 different individuals, which showed a nine percent
increase in her repayment. These are just some of the thousands
of different data points that we look at to understand
a person’s creditworthiness. And after analyzing all
of these different data points, we took the first risk and gave Jenipher a loan. This is data that would not
be found on a paper trail or in any formal financial record. But it proves trust. By looking beyond income, we can see that people in emerging markets that may seem risky
and unpredictable on the surface are actually willing and have
the capacity to repay. Our credit scores have helped us deliver
over 200,000 loans in Kenya in just the past year. And our repayment rates
are above 90 percent — which, by the way, is in line
with traditional bank repayment rates. With something as simple
as a credit score, we’re giving people the power
to build their own futures. Our customers have used
their loans for family expenses, emergencies, travel and for investing back
into growing their businesses. They’re now building better
economies and communities where more people can succeed. Over the past two years
of using our product, Jenipher has increased
her savings by 60 percent. She’s also started
two additional food stalls and is now making plans
for her own restaurant. She’s applying for a small-business loan
from a commercial bank, because she now has the credit history
to prove she deserves it. I saw Jenipher in Nairobi just last week, and she told me how excited
she was to get started. She said, “Only my son believed I could do this.
I didn’t think this was for me.” She’s lived her whole life believing that there was a part
of the world that was closed off to her. Our job now is to open
the world to Jenipher and the billions like her
that deserve to be trusted. Thank you. (Applause)

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About the Author: Oren Garnes

100 Comments

  1. it is FANTASTIC that they are finding non-money criteria to develop trust in other people.
    what a great way to handle the situtaion.

  2. Before I can trust someone with a loan, I need to know this person has something they value in monetary and societal value. Then I need to know there is a repercussion the borrower will face that will matter to the borrower.

  3. Good! That's how you transform 2.5 billion people into passive consumers in debt. What a load of crap!

  4. Great, she just turn the Google idea data mining your data in return of free services. So now she data mine your data and give you a loan.

  5. Fascinating idea.

    There's obvious concerns about granting access to so much personal data, but so long as it's an opt-in, temporary measure that you can back out of at any time while you're being assessed it should be pretty doable. Oversight would be a must as well, which would require government agility that just doesn't exist yet.

  6. I wish I didn't have a credit score. Due to mistakes almost a decade ago, I haven't been able to get a loan in the last decade.

  7. hmmm 2 billion plus that "big brother" could not track and now they found a way to put them under their thumb – impressive

  8. Money is a form of social control and credit a form of slavery. You're part of the problem, not the solution.

  9. wau you making the world a more beautiful place to be..Thank you and God bless you <3
    Sending you love and Light <3

  10. They have to sell their data to even get the chance to obtain a credit.
    This practice shows us once again how our data is valuable and how we should protect it.

  11. What an open minded and empathetic woman. It's good to see money lenders aren't all cold-hearted people who only focus on their own risk and profit. I hope this kind of system helps many underprivileged people start a better life 🙂

  12. 4:44
    "We completely, utterly buttfucked this person's privacy in exchange for debt. We are very proud of doing what not even banks were able to"

  13. 2.5 billion people without credit ? We learn to value eachother by the amount of debt or credit they have?2.5 billion peoples dont have a toilet or running water.Are we teaching eachother or learning what the lenders want us to learn?How have we as a species of free men and woman found ourselves in a bankers vault?The earth and our ancestors,our parents and grand paretns and great grand parents,who have served,slaved and been jailed in the past,for the benefit of King,Queen and politician?Im asking ,How have we the people become so poor.The money that has been donated,the spoils of War.The Stealing indigenous peoples lands?Really ,all we global humans are Serfs,Slaves and Convicts and if we are good and give our names and Information,we can borrow money,to take the chains of poverty that bind us and swap them for the heavy burden of debt. for the corporations and the Banks> The Venus Project-Global has solutions and ideas that free all peoples from the shackles that bind us.The Religious Organsitations on this planet,have trillions of dollars,the monarchy has Trillions of dollars .2016 and 2.5 billion people dont have credit?how many have Debt? Slaves of Poverty and Slaves of Debt.We are all still Slaves,Serfs And Convicts.

  14. The financial system is nothing that you should have trust in, seriously, and this whole thing built around that whole bs, while claiming it will bring prosperity in the long run is a bit sickening :S

  15. Her company can be trusted, right? Maybe or maybe not. But think for a second about the abuse the company that buys her "innocent" company could, and would do. Data miner's dream. Would not be surprised if this was a corrupt company already that hired a sweet, innocent, naive Indian girl to use a spokesperson. That isn't possible, right?!

  16. If you're not rich enough to enter into bondage with a capitalist multinational, we can now offer statistics based control and surveillance instruments to make sure that by just sacrificing every inch of your personal life and privacy, you too can be owned by a financial institution! That's what trust is all about!

  17. so much for privacy
    but if you need to trust financial institution to give you the money you have to sacrifice somthing in return.

  18. One small data leak from the company would put potentially every customer they have at risk, all that private data has to be sitting somewhere.
    They probably sell the data to enhance targeted advertisement in certain geographical locations, profits to be made off your day to day life.
    Wouldn't it just be easier to signup high traffic users to data mining apps and pay them instead of giving them a loan and requiring them to pay it back with interest?

    I just sell stolen chainsaws, my business is booming. No need for loans or private data, just chainsaws. Stolen ones, I got them.

  19. Banks finally found a way in our personnal data, after all. Beginning with poor countries is logical, how could a desperate population be aware of the usage of such information by the corporations ? They will be the first victims…

  20. Actually, this seems like a good business model. They can keep low interest rates, because most of their money will be made from the data they sell 😛

  21. smart? Risk management turned on its head. The barcode on the forehead is right around the corner……

  22. Its deeply worrying that with data mining, the corporations knows more about us than we know our self.

  23. Do you want money? Tell us who you stay in frequent contact with, where are you on a regular basis, where did you go last wednesday? Don't worry, no one will ever use this information to hurt you, all humans always have YOUR best interest in mind, so turning this information over to a private company is safe.

  24. Just the title tells me I'm out! Isn't this why we have bailed out the Savings and Loans and the Banks X2?
    I prefer 'debt-free' because even though my life lacks 'junk', it is rich in value and freedom.

  25. capitilism. faking it till we make it. and we will make it. we just have to eat it till then. and i do mean we. everyones miserable on a visceral level (it seems. i dare not speak for the trolls) not just the lower classes. give it to us. first society to create a miserable ruling class. hip horay. someone please send me some love drugs. im frustrated on many levels.. or money.. f***. or come fight me to the death. for the glory. we will be brothers in the next life. or lovers. ill fight a chick. IDGAF! and love a dude! kind of no not really. only to get with more chicks. but ill have 70 of them if i become martyred. imma comin mohammed!!!! elolooolololoLOLOLOLOLOLOLOOLOL!

  26. I think it's a sweet idea and can really have a huge impact for some people. The problem is they have access to very personal and private data of their customers and I really do want to believe that they use that data in confidential and respect but in the end when peoples' private data is at someone elses' hands other than their own there's a potential issues and I'm always skeptical. But well what other choice do they have? Maybe this is the less evil option for them.

  27. That's an ad for a company that exploit your personal data to know if you're worth loaning. The documentary "DoNotTrack" anounced it could happen someday, well, it happened. Bye-bye privacy, hello tracking and profiling…

  28. The irony is, I'd like to do business with a man who renegaded on a bank loan, just due to my loathing of banks. Honour amongst thieves still has weight outside the financial sector 😉

  29. I think no need for professional financial analysts after this speech… OMG I hope governments did not heard that as we're already suffering from unemployment, or our certificates will be thrown out to start voluntary business life.

  30. Very Nice video with good information. If any one is looking for small business loan
    Read this blog : https://medium.com/@amritaagarwal/what-is-the-best-way-to-get-small-business-loan-fe59fcf40644

  31. On behalf of Kenyans, we love you Shivani. And the great app TALA. At first I was attracted to Branch app (The rival loans app in Kenya) due to its better User Interface and ease of use but I became a TALA fan for its fast disbursement. Branch took too long I had to cancel the loan and uninstall. TALA is the best!!!

  32. https://shorttermcredits.com/business-loans.php is definitely the best one for bad credit. I applied and got a loan in 2 days. It's super easy and the customer service are very polite.

  33. Well, most traders didn't have proper training/practice, and learn made same/similar mistakes but later learned through the hard way (including myself). That's just part of the cost of learning. You just need to keep the focus on the goal, learn why you failed, then stand back again and do better next time. If you able to manage your emotion and risk, soon or later, you will do pretty good in trading. Looking for help to recover your loss on any trade/brokers, visit https://financialrefundcashback.org

  34. Recent privacy breaches such as Cambridge Analytical scandal make this model questionable. Are people aware of the complex operations behind the app? Like do they know that the app collects their very sensitive data and make use of it to build credit score? So using this approach meaning I have to surrender my privacy. Any thoughts on this? Is there a point where people consent on the use of specific data?

  35. i got no to maybe bad credit history because i dont borrow money i save up or pay installments to the owner isnt that messed up im too good with my money to get a loan instead those who borrow all the time are prefered 🙁

  36. where do you get this service ? nevermind found it on screen playing vid again mkopo rahisi im gonna save that not that i plan on borrowing yet site is here https://www.mpesaloans.com/mkopo-rahisi/

  37. Lutherangrants/org saved me from bad credit .With their grant schemes i received $30,000 just yesterday .

  38. David Allen Capital in Nashville, Tn.

    March 21 at 5:54 PM ·

    Good day business owners, we here at (D.A.C.) David Allen Capital are here to help our community grow. we are a large business capital agency, and part of the New York Stock Exchange ( ygyi)

    When the banks say no we say yes, "we value cash flow over credit score". one simple form, no collateral. no fees, an answer in 24 hrs. And funding in a week. no obligation.

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    The total cost of parts to be installed per bike = 12 usd
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