It wasn’t long ago that Shivani Siroya was just an upstart dabbling in investment banking. But in a few short years, big-time Silicon Valley investors like Chris Sacca declared that she was changing the world.
Siroya explained how, or at least the function of her digital-first credit-scoring company InVenture, at TheWrap’s 7th Annual Power Women Breakfast on Wednesday.
“We develop financial identities,” Siroya said of InVenture, which creates a way to evaluate loan candidates in the developing world, many of whom have never even heard of a credit score.
Most of the data points InVenture uses exist on candidates’ smartphones — which are prevalent in the developing world. “Your cell phone is literally your entire daily life: the people you talk to, where you go, what job you have,” Siroya said.
Siroya used the example of an independent restaurant owner who only makes a profit of $5-$10 per day in West Africa. If he needs a loan to buy fruits and vegetables, he’ll have to turn to loan sharks for an interest rate of a staggering 330-700 percent.
Inventure uses a questionnaire and back-end data form to build a new kind of credit score, and, if approved, deposits a loan into the restaurant’s mobile wallet for a 3-5 percent annual fee.
“There are 2.5 billion people around the world in the informal economy,” Siroya said. “We ask ourselves, ‘How can we provide financial access to people we’ve never seen or heard before?’”
Watch a video clip from her full talk here.