I have read about Grameen bank concept few years ago, and I felt interested in the model because of it’s unique breakthrough as a social business model and also because of it’s powerful ability to help the poor people get a loan much easier to improve their life. According to Wikipedia:
“Grameen Bank makes small loans (known as microcredit or “grameencredit”) to the impoverished without requiring collateral. The name Grameen is derived from the word gram which means “rural” or “village” in the Sanskrit language. Micro-credit loans are based on the concept that the poor have skills that are under-utilized and, with incentive, they can earn more money. A group-based credit approach is applied to use peer-pressure within a group to ensure the borrowers follow through and conduct their financial affairs with discipline, ensuring repayment and allowing the borrowers to develop good credit standing.”
Eventually Grameen Bank and it’s author Muhamad Yunus jointly won the Nobel Peace Prize. So when I know Lenddo I guess there would be a connection between the two. Let’s see what Lenddo describes themself on their website
“Lenddo is the world’s first online platform that helps the emerging middle class use their social connections to build their creditworthiness and access local financial services. By combining community-based microfinance techniques with social media data, Lenddo is pioneering a new approach to serve the underbanked. We believe that the willingness of your community to vouch for you, coupled with data about how you behave online, can unlock opportunities to access much-needed financial services. If you are active on social networks and need a life-improving loan now or in the future, Lenddo is the community for you!”
Even though Lenddo doesn’t own a Nobel Prize but the social startup has been featured on Wall Street Journal, The Economist, TechCrunch, Venture Beat… Then I wanna to discover Lenddo’s model through a different angle via an interview with Richard Eldridge – Lenddo’s Asia CEO and co-founder.
Can we consider Lenddo an online version of Grameen Bank concept?
The Grameen bank model is indeed an inspiration for Lenddo. Using community relationships or a trusted circle as a vouching method to help people get access to non collaterized loans
Any main similarities or differences from Grameen Bank?
Basic principles of community based reference model is still shared similarly , main difference would be our online nature where we use social networks as a vouching method instead of physically being present in actual communities to scale quickly.
Where are the sources of loan money for people? mostly from Lenddo raised money or they could be from the tradditional banks?
The sources of loans would be thru various MFIs or financial institutions that Lenddo has partnered with and whom utilizes our credit platform .
How about the interest rate of Lenddo loan if compared with traditional banks’ interest in a same country?
Lenddo tries to help people whom are unbanked or underbanked due to the lack of credit data collected by a financial institution , once our platform or alternative data is accessed by our partner Financial institution interest rates would be competitive to traditional banks as compared to a loan shark whom would charge really high .
The countries Lenddo operating are scattered to some different continents. So how can Lenddo team handles this matter?
Note: Lenddo is operating in Manila (Philippines), Bogotá (Colombia) and New York City (USA)
Lenddo has local offices in the different regions we operate in. But due to the online nature of the business it is a natural advantage for us to be able to expand to different geographic areas quickly with minimum manpower deployment on the ground.
What if a borrower tries to be more active on Facebook and other social media channels to get more credits, eg. he/she might want to cheat to get loan? How can Lenddo prevent this situation?
Lenddo has proprietary algorithms developed by our in-house data scientists that would be able to detect and prevent this from happening.
What are the most challenging works of Lenddo? Are they more about big data, finance or social media matter?
As a pioneer in creating this technology to help the emerging middle class in developing countries around the world, the challenging task for Lenddo is to have this new concept to be adapted to more developing countries at a quick scale.