The World Economic Forum recently selected 36 startups which are generating innovative technologies and solutions for unresolved or longstanding problems. Amongst the 2014 Technology Pioneers, and sitting shoulder-to-shoulder with the likes of AirBnb, CodeAcademy and GitHub is Lenddo. Lenddo, a Mambu customer, is using social media profiles to build credit ratings that enable the emerging middle classes to access loans and other financial services
In emerging economies, the new middle classes typically struggle with excessively bureaucratic procedures to access bank loans for purposes such as medical expenses, home improvements, small business investments or school fees.
Lenddo innovates around loans for this class by leveraging social data which provide a rich source of data about their character virtues, such as honesty and consistency. Using data sources like Facebook, Twitter and LinkedIn, Lenddo is able to give out loans faster, cheaper and easier than alternative providers.
Importantly, while not a microfinance organisation, Lenddo applies the original principles of lending and microfinance: using members of a community who are able to vouch for each other’s character and trustworthiness. These are the same principles that drive credit unions around the world and are the heart of everyday ‘IOU’s’ that are exchanged between family and friends.
While we take these services for granted in high-income countries, Lenddo has brought these concepts to the 21st century and is using them to provide to thousands of life-improving loans in emerging markets around the world. For that, they certainly deserve to be recognized by the World Economic Forum, whose motto is “commitment to improve the state of the world.”