The co-founder, Social Lender, Bade Adesemowo has described the social way of lending as a tool used to collate customers’ data for innovation and development in all sectors of the economy.
Adesemowo said that part of what the company does is to build a social network for credit and trust.
“Social lender is not just about lending. It can be used for insurance. It can be used for Know Your Customer (KYC), which is one of the biggest problems in Africa. It can be used to earn trust, pension and so many other things.
“We are giving out online social reputation score to measure trust for banks, as the banks lend against the social reputation score.”
He added that social lending is not a new generation tool for accessing fund but that it has been in existence for over 200 years.
Adesemowo said that what gives the practice the latest cutting edge is “how technology is being used to disrupt ways of doing things now”.
In his explanation, the financial technology expert said that no technology exist to simplify ways of practicing social lending 200 years ago.
“The only acceptable means that existed 200 years ago was for friends or family to stand as guarantors for others based on relationship, which stem from family ties like family houses, marriages and surnames. This was used as a means of extending financial services such as loans to others which social reputation does”, he said.
He added that what Social Lender does is using technology to harness digital space and online and mobile platforms that have digital connection of any sort.
“Today, we have less than 4% bad debts. If you look at microfinance banks generally, what they do is 7-9% bad debt. For secured lending, 4% is a good figure and for us as an unsecured lending platform to achieve that number is very interesting to our partners.”