Big Data to help promote microlending

  • 25 Jul
  • 2 min

Analyzing large volumes of available data helps to assess the impact of microlending and, going forward, to integrate unbanked sections of the population into the financial sphere.

Microloan organisation Kiva is on a mission to help some of the two billion people all over the world who have no bank account to obtain sufficient financial resources to bring their plans and projects to fruition. So far Kiva has enabled loans worth two billion dollars to be made in 85 countries around the world. In addition, during its crowd-lending campaigns, the San Francisco-based organisation has gathered masses of data on the people it has enabled to obtain loans and it now intends to process this valuable information in order to help integrate those sections of the population more closely into the economic sphere. For instance, by processing the volumes of data available, Kiva is able to demonstrate that the overwhelming majority (97%) of borrowers repay on time – a convincing argument when it comes to attracting more potential lenders. It has also shown that refugee populations are as likely to repay their loans as any other borrower segment. Meanwhile the Californian non-profit is able to assess the positive impact that microlending has on the people who receive such loans. In order to carry out this data analysis, Kiva has teamed up with Snowflake, a Silicon Valley startup that specializes in storing and processing data in the Cloud. Going forward, the two companies intend to work together to provide every person who has been granted a microloan with a traceable, verifiable banking history so as to help them access other financial resources in the future. This kind of system could make use of the Blockchain to create a secure, decentralized database. Kiva is currently investigating this idea in tandem with a number of international organisations, including the World Bank and the United Nations Organisation.

By Guillaume Renouard