In a world where Bitcoin wants to make your personal identity irrelevant, disruptive data scientists InVenturewant to reinvent it.
People are repositories of rich information and contextual data, Shivani Siroya, CEO and founder of InVenture told the audience at WIRED Money at London's British Museum on 8 July. And yet in most economies a single number -- the credit score -- remains the blunt instrument by which we evaluate who can receive loans, and who is likely to pay them back.
The result is that across the globe 2.5 billion people have no chance of receiving loans that can fund new businesses and lift entire economies out of poverty.
Speaking at the 'People Element' session alongside The Misfit Economy author, Alexa Clay, Siroyaexplained how InVenture is thinking differently. Instead of a single score, InVenture gathers an average of 10,000 data points for every user in traditionally ignored economies, to give credit, offers and other personalised services in real time. "Just a few years ago we thought this problem couldn't be solved," she said. "And we thought opening up critical financial services to the base of the pyramid would be too costly and too risky."
But it isn't, she said. And the key is starting "with the person rather than the system".
Prior to founding InVenture, Siroya worked in equity research, and mergers and acquisitions, at UBS and Citigroup/Healthnet, and formerly worked for the United Nations Population Fund.
Her company puts InVenture's science into practice with its app Mkopo Rahisi, which launched in Kenya and has already loaned $1.5m (£975,000) to businesses and individuals. With this app, InVenture considers people in the context of their financial transactions, but also data like their social media accounts and web searches, to build a rich profile of their personality. From this it works out the terms of loans and delivers them instantly to mobile phones. "We service all our loans digitally through services like SMS, Facebook and WhatsApp," Siroya said. "It's a financial identity that looks more like a person and less like a score [...] It's an entirely new way of thinking about financial products." "We do this in under one minute," Siroya added. InVenture can understand who pays their bills on time, who uses capital wisely and where their sales come from. As a result they can ensure a better repayment rate in risky markets (they have reached 85 percent repayment in Kenya on 40,000 loans, and a 92 percent repeat rate). More crucially, they have found a way to build financial identities for those who otherwise would have none.
InVenture now plans to launch Mkopo Rahisi in more countries, building on existing markets in Kenya and Tanzania to two more countries by 2016. But the firm is also thinking bigger: with a more "vivid and accurate" picture of businesses and people in Kenya and other countries, an entire spectrum of financial services could become viable. "The formal economy has not yet moved to meet these individuals," Siroya said. InVenture, it seems, might get there first.
This article was originally published by WIRED UK
