Can Lenndo Be the Definitive Lender for the World's Emerging Middle Class? Jessi Hempel - Fortune
go to original March 20, 2014

Forget microfinance. The startup Lenddo is using social data to determine credit scores for a new group of lendees. (Lenddo)

A big challenge for people in an emerging middle class who are struggling to find avenues to credit is that they rarely have formal credit histories.

They do, however, have social networks - rich communities of family members and friends who can vouch for their character and credibility. And increasingly, as smartphones open up the Internet's opportunities to growing numbers of people, they have online social networks that mirror their communities.

Enter Lenddo, a financial technology startup that calculates the risk of making loans to people in the Philippines, Colombia and Mexico based on social data. "Social network use in our demographic in the Philippines is heavier than in Northern California," says Jeff Stewart, the site's CEO and co-founder.

Lenddo is betting that the digital exhaust of loan candidates offers better evidence that they can repay a loan than what's provided by a traditional credit score - especially for people just entering the middle class, a group Stewart estimates to include 1.2 billion people. Their behavior on these networks, as well as the ties they have to others, provides a rich source of data about their character. The Hong Kong-based company has $14 million in capital from Accel Partners and others, and also owns the institutions in each country that fulfill the loans.

Read the rest at CNNMoney

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