American firm Inventure mines phone data to offer small loans

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Ami Gosalia, the head of growth  at Inventure. PHOTO | COURTESY

Ami Gosalia, the head of growth at Inventure. PHOTO | COURTESY 


Posted  Wednesday, February 10   2016 at  15:27

Martin Gacheru’s salon business based in Nakuru was not doing well. The startup was facing restocking challenges which required an urgent capital boost.


However, Mr Gacheru was servicing loans from various banks which made borrowing new funds impossible.

One day, while fidgeting with his phone, Mr Gacheru noticed an app, downloaded it, answered a few questions and received Sh2,000 instantly on his M-Pesa account.

Surprised by how fast the loan had been cleared, Mr Gacheru Googled for more information and found out that the firm behind the app and funds was called Mkopo Rahisi.

It was owned by Inventure, a leading early-stage venture capital company based in Silicon Valley, in the US.

Inventure is a mobile-based firm which provides short-term, no collateral, low-interest loans through a simple application on a user’s phone powered by Android.

“I acquired several loans which I repaid weekly until I was able to restock my salon,” Mr Gacheru told the Business Daily in a phone interview.

Mr Gacheru is one of the 50,000 borrowers who have benefited from Mkopo Rahisi, a credit facility launched in March 2014 in Kenya.

The service has seen 180,000 applications downloaded and disbursed 200,000 loans valued at Sh500 million. Mkopo Rahisi is one of the many mobile-based credit providers available in the country.

Others are the KCB-M-Pesa facility, a partnership between leading mobile service provider Safaricom and Kenya Commercial Bank, and M-Shwari — offered by Commercial Bank of Africa and Safaricom.

Equity, through Equitel, also gives its customers loans via their phones.

However, unlike the competition, Inventure does not require collateral, a bank account or savings to lend one money.

“We are different from our competitors because we don’t require savings or a bank account. We also provide credit instantly, under five minutes, from when you download the app to having the money in your mobile money account.

‘‘Additionally, we don’t merely use traditional financial data to assess risk so we can lend to more people at more affordable interest rates,” said Ms Ami Gosalia, the head of growth at Inventure.

With the user’s permission, Inventure collects data from the applicant’s mobile device to verify their identity, build financial, behavioural, and social characteristics. The firm uses the data collected to customise loan terms for each client’s unique circumstances.

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