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