How to Lend Money to Strangers

I spent several years creating industry-level research for one of the big credit bureaus, first in Asia and then in Europe. During that time, one of my defining projects was a deep dive into the value generated by consumers monitoring their own credit reports. Prior to my study, I'd only seen this addressed as a single question: do consumers who monitor their own credit data regularly, see improvi...

We owe this episode to a comment Praveen Sinha made in episode 15. Praveen was talking about the trends to watch in fintech/ lending in India and mentioned cryptocurrency as an asset he'd love to lend against, not least of all for the global scope it could add to his business. And that stuck in my mind. So when I learned of AQRU and the fact that they were paying actual money interest on crypto de...

For the last 20 years, I've been delivering lending projects across the credit life-cycle and around the world, but always focused on the consumer. The only time I've come into contact with small business lending is on the very fringes when we've used a business owners personal credit report to estimate the risk of their new business. Or, in other words, I've only ever seen half of the picture. I...

New Zealand might be forgotten from world maps so often that it’s become a meme, but that didn’t stop today’s guest from taking his career truly global. Chris Somervell’s has worked in eight countries while away from home, predominantly managing collections operations. And that’s what we discuss: lessons learned as technology developed and cultures changed alongside him, and a fundamental reimagin...

In episode 17 of this show, John Cannon said of identity that “when you really sit down and think about it, in the digital world, it is broken." On the back of that statement, we could hardly leave it to just the one discussion, so in this episode, I’m talking to Jaime Ramirez, founder and CEO of Preventor, a Miami-based fintech that’s building the next generation in ID verification and financial...

A lender will always want to know as much as possible about a business’ health before extending credit. That’s not changed, but until recently the only data that could help in that regard was slow and expensive to produce. And in turn, SME loan application processes were slow and expensive to complete. To make matters worse, these slow and expensively-produced numbers are seldom fit for purpose, e...

I've worked in consumer credit for 20 years, but I think the first time that I heard of anybody trying to use a psychometric-based scorecard for making credit decisions was over a few beers with my friend Sam, who has a psychology degree and works in marketing. And I dismissed that because I figured these aren't my customers. In many ways, though, the fact that they weren’t my customers, as a trad...

In the very first episode of HTLMTS, Raymond Anderson mentioned a consultant who’d served as something of a mentor to him – Jes Freemantle. So it feels fitting that, to wrap up the year and the first season of the show, we have Jes himself on, talking about his current project building bureaus scores in Nigeria, as well as a career spent as a scorecard pioneer. Jes runs Stratus Credit Consultancy...

Back of the envelope, according to Poets and Quants, a Harvard MBA will set you back $130,000 per year once you've added in all the extra costs, maybe knocked down to $100,000 if you get yourself a scholarship. That's already a lot of money if you're an up-and-coming American executive, but it is it even more if you're living and working in the developing world. One hundred thousand dollars is R1....

It used to be that to speak about credit bureau data, was to speak about defaults. But negative banking data became comprehensive banking data, became comprehensive financial services data, became comprehensive financial services, telco, and insurance data... ...And that expansion continues, as all sorts of new and open data sources are brought into the fold. Talking to me about the expanding defi...

I've always been interested in emerging markets, which early in my career meant the BRICs - Brazil, Russia, India, and China (and, yes, South Africa, but I've always felt we squeezed ourselves a little uncomfortably into that one. But I digress, my main point is that today it seems that we're hearing from Brazil (with Nubank) and India and China (with a bag full of unicorns each). But Russia, I th...

Level with me, how often do you really go to the dentist? Is it every 6 months like they tell you to? Look, I’m not here to judge you, I’ve certainly missed my share of recommended appointments, and it’s not because I don’t believe there’s a benefit to doing so, it’s just that avoiding unpleasant tasks is always an attractive option when the alternative is doing an unpleasant task. The same bad ha...

Is this another BNPL episode? Of course, it is. But what can I say, the world seems to have an unquenchable thirst for the model right now 😁 Plus, this one is a little different as I’m now speaking to a BNPL provider, but rather to Jaime Marín Merlo of Fiizy, an Estonian fintech that focuses on bringing lenders and merchants into that BNPL boom. Jaime is the director of business development for F...

My very first job was building models to catch credit card fraud, at that time we were most concerned with counterfeited cards, then lost/ stolen cards, and in third place at best came identity fraud. It was an emerging threat, and we were hearing word of the likes of Hunter  being rolled out in the bigger markets, but we were able to keep a pretty good handle on it with a system my boss had cobbl...

In this week’s episode of HTLMTS, I speak to Matt Fabian , TransUnion Canada's Director for Research and Consulting. Matt spoke to me about the credit resilience he’s seen displayed during the COVID-19 pandemic and the early shoots of growth that have recently become visible. And also about BNPL and whether these new lenders might nip in and gather that growth for themselves before the big players...

Powered by a growing middle class and a more connected rural population, the Indian consumer credit economy is carrying a lot of momentum , as is the market for MSME loans . And where most fast-growing markets are small, this is obviously not the case with India, where 1.4 billion people and nearly 50 million SMEs live. Add to that, a history of digitalisation and innovation and it’s market you re...

The Vikings are coming! The Vikings are coming! For a long time, the Nordic financial services market was a geographically contained one, with just 25 million consumers spread across the four major Nordic nations, growth of even the best business models could be capped. But not anymore, with digital channels providing a route to the rest of the world, several Nordics fintechs are following in the...

Hong Kong is a small market, smaller still in the shadow of the Chinese Mainland market which we explored in episode 4 of  How to Lend Money to Stranger s . That said, its high concentration of low-risk/ high-income consumers make it a useful training ground for lenders looking to target prime and better customers. In this thirteenth episode 13 of HTLMTS I speak to Dr Francis Lau about the strengt...

Poor infrastructure was an insurmountable hurdle for the traditional banking model in many developing markets. Branches were too expensive to install and then often too hard to reach for many. The first waves of digital banking helped to alleviate some of this pain, but only for the lucky few who had access to a stable internet supply - so typically the wealthier folk in the bigger cities. And the...

I’ve been an international immigrant three times now – into Denmark, into Hong Kong, and into the UK. In each case there was the expected pile of government paperwork to get there, but also then an equally tiresome series of hoops to jump through before you’re considered a full part of the credit economy. Want a phone contract? What’s your credit history? Want a lease? What’s your credit history?...

Last week I had the pleasure of hosting a panel discussion at a virtual event hosted by some of my friends and ex-colleagues at TransUnion in the Philippines. The theme of the day’s talk was on how lenders can meet the ever-growing demand consumers have for instant gratification, and since that include talk of BNPL and alternative data scores among other topics that have been popular here, I decid...

I named this podcast How to Lend Money to Strangers because for the last twenty years that’s exactly what I’ve been trying to do. And although I’ve taken on projects across the credit lifecycle and on three continents, the underlying goal has almost always been to find enough data to turn strangers into customers we can know. But Craig Smith has deftly flipped this on its head. With JustLend, he i...

The traditional credit model is often underpinned by an existing credit history. This makes sense mathematically, after all the best predictor of future delinquency is past delinquency, but it can present a barrier to entry to some customers – if you won’t give me credit today because I haven’t had credit before, then how can I ever get credit? Consumers with thin files - or indeed no files at all...

For a long time, collections teams tended to look a bit like government departments, where customers are assumed to have no alternative but to put up with the process they’re given. And not necessarily by choice. Fifteen years ago I was rolling out a collections training program for a bank in Africa, and we were speaking about the incredible role the function could play in relationship building ev...

Few of us will have experienced something as disruptive as COVID-19. The disease, and the lockdowns that followed it, shaped national economies and individual's lifestyle choices in markets around the world. In today's episode, I catch up with Matt Komos - LinkedIn and find out how the American consumer credit industry has held up. As TransUnion's VP for Research and Consulting, Matt is able to co...