Financially-limited social networkers can now get a credit score based on their online community. Loans are given to employed members that are connected and bring friends and family to the site.

Lenddo Gives Loans Based on Social Network Credit


The financial industry is being disrupted by the power of social networking once again - this time in the personal loan category. While Klout assesses an individual’s worthiness based on their connections and followers, community credit assessor Lenddowill furnish financial products to folks after giving them their own Lenddo credit score. This is the first instance of credit being determined and given based on social accounts and members’ ability to refer new members to the site and build an internal network. The service aims to be practical and success-oriented - they include financial education and limit first loans to one month’s salary.

Social networks are used to verify and incentivize loan recipients

New members get started by connecting their profile to several social network accounts and webmail. Anyone can join Lenddo, but they receive a credit score that is based on the social graph that is created by their Facebook, Twitter, LinkedIn, Google and Yahoo accounts, as well as others. They can then further build up that score by inviting others and developing an internal network on Lenddo. The site is not a bank, nor a peer-to-peer lending service, but a financial product provider that offers these products directly to the member, or through an affiliate or third party. Only employed individuals can qualify for a loan. When members fail to make a payment, and do not maintain contact with Lenddo, they notify friends and family, as well as lower the credit scores of those in the internal Lenddo network.

Banks and others could learn to evaluate based on social networks, too

While Lenddo can have a significant impact on consumer finance, it may also be a significant catalyst for the rest of the industry. The service circumvents much of the bureaucracy that comes with loan applications - Lenddo claims that application responses can come in a single business day. An agile business structure, financial responsibility classes and the emphasis on personal connections are elements of this company that could greatly influence financial institutions. This type of business may also attract the type of borrower that may be poor in traditional credit but rich in social credit - this customer will be very mindful of their online community through the application and payback process.

By Ivory King