Can your social media behaviour, be it on Facebook or Twitter, help you access credit? It can, so it seems, especially if you are first-time borrower.
A relatively new entrant in the market – Lenddo, a Singapore-headquarterd entity – is using non-traditional data from Facebook, Twitter, mobile phones, and transactional data from e-commerce firms, payment gateways and wallets to develop credit scores for first-time borrowers of lending institutions.
“Nearly 80 per cent of India’s population has no credit history, especially those in the 21-35 years age bracket and are often denied credit by formal lending institutions. We are supporting these first-time borrowers to get loans by creating a credit score for them,” Abhinav Haldia, Country Director, India, Lenddo, told FeMoney.
Lenddo looks at non-traditional data for credit scoring to assess ‘willingness to pay’ while credit scores availaible at Cibil are arrived at by anlaysing ‘ability to pay’, Haldia said. To analyse ability to pay, lenders have access to hard data like pay-slips, Income Tax Returns and repayment history, while Lenddo looks at behviour over the various platforms to assess the willingness to pay. “With Lenddo’s score a lender can distinguish between a good customer from a bad one,” he said.
Lenddo is tying up with banks, NBFCs and Peer-to-Peer (P2P) lenders in India to offer their credit scoring services. Lenddo is already working with two P2P lenders – iLend and Lendingkart – and more than 10 formal lending institutions. Haldia expressed inability to divulge names of formal lending institutions because of non-disclsoure agreements. “We have supported over 100,000 borrowrs in 15 countries,” Haldia said. Lenddo started India operations nearly a year ago.
Haldia said those whose behaviour is analysed by Lenddo would fall in the annual income group ranging from Rs 1.5-8 Lakhs. Also, the age of borrower could go up to 60. “There could be borrowers of higher age group who do not have previous credit history and are in need of a loan, though the percentage would be small. Our service helps borrowers to stay with the formal lending channels and access loans at softer rates instead fo having to go to non-formal channels where they charge hefty interest rates,” he said.
The lender with whom Lenddo has tied up for credit scoring takes permission from the borrower before accessing and analysing social media behaviour of the loan applicant. “We comply with all IT and privacy laws,” Haldia said on whether their service could be intrusive for clients.
He, however, clarified that those with an existing adverse credit history cannot benefit from Lenddo’s services. “If you have adverse history credit history, the institution will not lend. We cannot help in such a situation,” Haldia said.