Social media data can now get you a soft loan

If you have a clean credit record online you are eligible for lending through Mkopo Rahisi

Ronald Maira is living his dream by leveraging on passion to unlock trillions of shillings of purchasing power that exists within a majority of people locked out of credit due to lack of collateral.

His compelling enthusiasm on analytics, risk management and performance improvement has propelled him up the career ladder to a position that allows him to drive the idea of pushing for deeper financial inclusion using technology by offering cheaper short-term loans.

Maira is the Kenya Business director at InVenture Capital, a financial services firm that uses social media data to give micro-loans through its flagship product, Mkopo Rahisi. Experts in the financial services sector have argued that lending to individuals without collateral is risky, a reason why most commercial banks overlook such clients.

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But Maira does not describe his clientele as risky. “We bring in over 10,000 different data points per customer in less than one minute to help us determine if an applicant qualifies for an Mkopo Rahisi loan,” says Maira.

The credit company looks at borrowers name, consistency, email, work, education, banking and outstanding loans across registration and social networks for verification.

Through this information they can find out a persons social class and the kind of people they interact with. If one gets a good score they do not need a bank account to access credit; they are only required to have an active M-Pesa account.

The platform gathers its reference data points from services like SMS, Facebook and WhatsApp to rate users. “Based on a user’s repayment behaviour and interaction with our system, we are able to provide higher limits, better loan terms and products that better fit the customer needs,” Maira says.

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Most customers are also giving the company product feedback and telling stories about how they have used the credit to grow their busineses and help them through tough times. Approximately 55 per cent users of its facility, borrowed to grow business, 19 per cent to support travel, 14 percent for emergency while 12 per cent went for personal loans.

We see our product as a method for Kenyans to establish a formal financial identity and proven track record,” says Maira. Interest rates range from five-15 percent per loan-By showing good repayment behaviour, borrowers can qualify for better rates over time. The firm’s current maximum loan limit is Sh10,000 with a plan to increase to Sh100,000 in the future.

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