Faith Adesemowo, co-founder and CEO, Social Lender, has said that the company, a lending solution platform, is committed to building a community of trust and credit to drive financial inclusion for the un-banked and under-banked.
Adesemowo maintained that Social Lender helps financial institutions to extend formal credit not to only salary earners but also to young professionals, small business owners, market women, entrepreneurs and students to leverage on their social reputation.
She, however, emphasized that the principles of lending is still the same across all platforms, adding that digital lending platforms are only “here to enable traditional lending to run more smoothly, efficiently and bring them to the space they don’t typically operate in”.
According to her, Social Lender does not focus on only on users with internet and smart phones, but also on the community of the individuals.
“Social Lender is not a lender but a platform that enables lenders target demography or segment of the market. We run a co-label and white-label partnerships with lenders and financial institutions,” she said.
She further explained the social reputation algorithm behind Social Lender, saying it is enough to guarantee willingness and ability to pay back loans.
Adesemowo said that the “social reputation score” has proven over the years to be a strong tool to ascertain willingness to repay loans.
“It takes into account the users’ community, engagement, network and several other indicators both online and offline. This is dependent on the data the user gives us permission to.
“The solution collects this data and processes it to give the user a social reputation score. It’s an artificial intelligence-based solution that gives users’ ability and willingness to repay small loans under a particular ticket size.”
She added that the ability to repay larger loans is a slightly different parametre, which technology can only do by reviewing transaction history of the user. The social reputation score focuses on “trust” or you could say “willingness to repay”.
“We have an end-to-end lending platform that can review users’ transaction history with some of our partner banks and partner financial institutions. This feeds into the partner specific business rules for lending specific amounts. I should emphasize however that social reputation score is the main asset of Social Lender,” she emphasized.
She noted that open APIs and blockchain technology would afford lenders the opportunity to enjoy more services when using any lending platform.
“With Open APIs, more financial institutions will have access to data that was previously sited in silos that will help expand the space. This is happening gradually. We hope for a similar regulation to enforce financial institutions to share more data over time”, she concluded.