But that’s changing as the poor start leaving data trails on the Internet and on their cell phones. Now that data can be mined for what it says about someone’s creditworthiness, likeliness to repay, and all that hardcore stuff lenders want to know.
“Every time these individuals make a phone call, send a text, browse the Internet, engage social media networks, or top up their prepaid cards, they deepen the digital footprints they are leaving behind,” says a new report from the Omidyar Network. “These digital footprints are helping to spark a new kind of revolution in lending.”
The report, called “Big Data, Small Credit,” looks at the potential to expand credit access by analyzing mobile and smartphone usage data, utility records, Internet browsing patters and social media behavior….
“In the last few years, a cluster of fast-emerging and innovative firms has begun to use highly predictive technologies and algorithms to interrogate and generate insights from these footprints,” the report says.
“Though these are early days, there is enough to suggest that hundreds of millions of mass-market consumers may not have to remain ‘invisible’ to formal, unsecured credit for much longer.”…(More)