it’s literally too expensive for the
banks to be able to lend to the markets
that 50% today they need to ascertain
ability to repair they need to ascertain
willingness to repay they would maybe
ask for collateral most of these people
do not have collateral in the in the
sense of the world and so on and so
forth but with social reputation
something that we all have it is
possible to actually then be able to
lend that market and that’s what we’ve
been doing at social lender building a
solution that can actually unless that
digital fingerprint I spoke about and
convert it into a measure of trusts a
measure of trustworthiness taking a look
at things like your connection taking a
look at your engagement taking a look at
who you know will you mix retrieving tie
to it and so many other indices hundreds
of indices to be honest right and what
we do is that we are able to provide to
the lenders a social reputation score
now the lender is able to lend through
individuals using that fingerprint the
social reputation score for you to
understand the size of this in terms of
mobile phone penetration depending on
which is you talk to they say the mobile
phone penetration is about seven to five
P cents now if you take a look at Wal
Bank data as regards how many people
have access to form our credits it’s
just about 10% there’s a huge gap there
and that huge gap is something we
believe social reputation is going to be
able to do it now social reputation in
itself is an ancient technology it’s not
new passive I already explained to you
that it’s the measure and it was the way
we did business especially in Africa in
the olden days all we are doing is that
we are using modern technology so unless
the same kind of concepts now the truth
is that this is not new
this is not
fantasy it is something we have actually
been doing for the last two years in
Nigeria we’ve partnered with sterling
Bank with the protocols telling Bank
social lender to be able to lend to
people like Beluga who needed to pay his
child school fees and it was not able to
because the salary was delayed we’ve
been able to lend to people like Paul
and his wife we wanted to start a petty
business and they required capital they
require capital to do so Elvis in his
own case needed additional working
capital and all of these people were
able to benefit from such a technology
such a technology that was able to
Anna’s not using the traditional credit
score but using this new technology this
what I showed you is not really new
technology is what we used to do in
Africa and there are several other
people that I’ve been using this
technology to to be able to access
credits not just in Nigeria where we
started from
but also in South Africa where APSA has
actually been using this technology to
give credit cards to students now I
should tell you something about students
because of of the people 65 percent
really that do not have a credit score
or according files today actually under
the age of 35 somebody mentioned it
already today right they are thinking
files because the credit scoring system
today depends on your history it does
not take a look at your present it does
not take a look at your future and
that’s what we are using this for now
this just shows some of the reasons why
they’ve some of these people have had to
borrow from things from medical bill to
emergency cash to school fees and so on
and so forth and using this system we’ve
seen an incredibly low default rate four
point one percent as actually to put it
in context the bankers in the room would
know the microfinance Bank evade default
rates of at least 10 percent sometimes
15 percent and that’s part of the reason
why interest rate
that should be as I sometimes as they
are but one of the things we are doing
is that we are trying to reduce even
this default rate further we are
improving our algorithm we are applying
machine learning as much as possible we
are adding more data points as much as
possible and we are doing all of these
things to see if we can get to about 1%
default rates what does that mean we
have a system that is able to determine
trustworthiness we are doing well to a
tune of 4.1% today now my topic today is
social reputation as a collateral and
the traditional bankers in the room
would say oh this thing is intangible
how can you call it collateral the
definition of collateral and I put that
up on the screen from investopedia
because of time I won’t bother reading
it but there are some key points in
there one of the key point is that
collateral has to be property or an
asset i will not also spend time
explaining to you how your digital
fingerprint your social reputation is
actually your asset I already mentioned
that the next part of that definition
says that a borrower offers a relief for
a lender to secure a loan and that’s the
system we’ve been building a system to
unless the social reputation of people
for them to be able to offer it to
lenders to be able to get a loan the
next part of the definition of
collateral says the lender can seize the
collateral to recoup its losses and
social reputation actually meets that
criteria as well in an example of alanda
in Nigeria or sterling bank if a
borrower defaults the lender can
actually take a part of that loan from
the passing social Garant or a social
guarantor is a part of that person’s
social reputation in the case of another
lender
if the borrower defaults the interest
rates of the people in that person’s
immediate Saku
goes slightly higher to be able to
recoup the default of that one person
that defaulted the last part of the
definitions is typically having a lower
interest rates than other unsecured
loans and that’s also true in the case
of this system I’m talking about I
already mentioned to you that our
default rate is lower and because that
default rates is lower the lenders can
actually have a lower interest rate or
transaction charge as the case may be
but what I’m talking about today is
bigger than any one company what I’m
talking about today is social reputation
to be able to be which can be used for
much more it’s a measure of trust many
industries can use this system I do not
have enough time but I would just say
one one of the other problems apart from
lending that we do have in Africa and of
course in Nigeria which is kyc know your
customers if nine people that you trust
say to you that this person is buddy and
this person is trustworthy would you
trust that person most likely your
answer is yes most likely your answer is
yes and so the question is kyc which is
one of the big problems where we have in
Africa why can’t we use a system like
this to solve it but it goes beyond that
as well it goes to credit bureaus who
are looking at your history not your
future it goes to the retail industry
it’s a measure of trust what we are
doing is building a social network for
trust for credits and for much more the
system we have today is called social
lender but as I mentioned this is an
idea bigger than anyone
Compton thank you [Applause]
banks to be able to lend to the markets
that 50% today they need to ascertain
ability to repair they need to ascertain
willingness to repay they would maybe
ask for collateral most of these people
do not have collateral in the in the
sense of the world and so on and so
forth but with social reputation
something that we all have it is
possible to actually then be able to
lend that market and that’s what we’ve
been doing at social lender building a
solution that can actually unless that
digital fingerprint I spoke about and
convert it into a measure of trusts a
measure of trustworthiness taking a look
at things like your connection taking a
look at your engagement taking a look at
who you know will you mix retrieving tie
to it and so many other indices hundreds
of indices to be honest right and what
we do is that we are able to provide to
the lenders a social reputation score
now the lender is able to lend through
individuals using that fingerprint the
social reputation score for you to
understand the size of this in terms of
mobile phone penetration depending on
which is you talk to they say the mobile
phone penetration is about seven to five
P cents now if you take a look at Wal
Bank data as regards how many people
have access to form our credits it’s
just about 10% there’s a huge gap there
and that huge gap is something we
believe social reputation is going to be
able to do it now social reputation in
itself is an ancient technology it’s not
new passive I already explained to you
that it’s the measure and it was the way
we did business especially in Africa in
the olden days all we are doing is that
we are using modern technology so unless
the same kind of concepts now the truth
is that this is not new
this is not
fantasy it is something we have actually
been doing for the last two years in
Nigeria we’ve partnered with sterling
Bank with the protocols telling Bank
social lender to be able to lend to
people like Beluga who needed to pay his
child school fees and it was not able to
because the salary was delayed we’ve
been able to lend to people like Paul
and his wife we wanted to start a petty
business and they required capital they
require capital to do so Elvis in his
own case needed additional working
capital and all of these people were
able to benefit from such a technology
such a technology that was able to
Anna’s not using the traditional credit
score but using this new technology this
what I showed you is not really new
technology is what we used to do in
Africa and there are several other
people that I’ve been using this
technology to to be able to access
credits not just in Nigeria where we
started from
but also in South Africa where APSA has
actually been using this technology to
give credit cards to students now I
should tell you something about students
because of of the people 65 percent
really that do not have a credit score
or according files today actually under
the age of 35 somebody mentioned it
already today right they are thinking
files because the credit scoring system
today depends on your history it does
not take a look at your present it does
not take a look at your future and
that’s what we are using this for now
this just shows some of the reasons why
they’ve some of these people have had to
borrow from things from medical bill to
emergency cash to school fees and so on
and so forth and using this system we’ve
seen an incredibly low default rate four
point one percent as actually to put it
in context the bankers in the room would
know the microfinance Bank evade default
rates of at least 10 percent sometimes
15 percent and that’s part of the reason
why interest rate
that should be as I sometimes as they
are but one of the things we are doing
is that we are trying to reduce even
this default rate further we are
improving our algorithm we are applying
machine learning as much as possible we
are adding more data points as much as
possible and we are doing all of these
things to see if we can get to about 1%
default rates what does that mean we
have a system that is able to determine
trustworthiness we are doing well to a
tune of 4.1% today now my topic today is
social reputation as a collateral and
the traditional bankers in the room
would say oh this thing is intangible
how can you call it collateral the
definition of collateral and I put that
up on the screen from investopedia
because of time I won’t bother reading
it but there are some key points in
there one of the key point is that
collateral has to be property or an
asset i will not also spend time
explaining to you how your digital
fingerprint your social reputation is
actually your asset I already mentioned
that the next part of that definition
says that a borrower offers a relief for
a lender to secure a loan and that’s the
system we’ve been building a system to
unless the social reputation of people
for them to be able to offer it to
lenders to be able to get a loan the
next part of the definition of
collateral says the lender can seize the
collateral to recoup its losses and
social reputation actually meets that
criteria as well in an example of alanda
in Nigeria or sterling bank if a
borrower defaults the lender can
actually take a part of that loan from
the passing social Garant or a social
guarantor is a part of that person’s
social reputation in the case of another
lender
if the borrower defaults the interest
rates of the people in that person’s
immediate Saku
goes slightly higher to be able to
recoup the default of that one person
that defaulted the last part of the
definitions is typically having a lower
interest rates than other unsecured
loans and that’s also true in the case
of this system I’m talking about I
already mentioned to you that our
default rate is lower and because that
default rates is lower the lenders can
actually have a lower interest rate or
transaction charge as the case may be
but what I’m talking about today is
bigger than any one company what I’m
talking about today is social reputation
to be able to be which can be used for
much more it’s a measure of trust many
industries can use this system I do not
have enough time but I would just say
one one of the other problems apart from
lending that we do have in Africa and of
course in Nigeria which is kyc know your
customers if nine people that you trust
say to you that this person is buddy and
this person is trustworthy would you
trust that person most likely your
answer is yes most likely your answer is
yes and so the question is kyc which is
one of the big problems where we have in
Africa why can’t we use a system like
this to solve it but it goes beyond that
as well it goes to credit bureaus who
are looking at your history not your
future it goes to the retail industry
it’s a measure of trust what we are
doing is building a social network for
trust for credits and for much more the
system we have today is called social
lender but as I mentioned this is an
idea bigger than anyone
Compton thank you [Applause]
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