india-digital-exhaust-aIn India it is still difficult for a person with an informal economy asset or income to get easy access to credit in spite of the availability of micro-finance.  In the absence of verifiable information on the borrower, the lending institution often had had to resort to on the spot physical investigation and monitoring, which is costly.

Big data is beginning to solve some of these issues, according to Richard Eldridge, co-founder and chief executive officer of Lenddo, a social authentication and scoring technology platform that uses non-traditional data.

Traditional credit evaluation mechanisms use information on credit history, repayment habits and borrowing history to give a score to a person, which determines her or his creditworthiness. But the financially excluded, and those in the informal sector, find it difficult to even get a step into the world of formal credit rating. Eldridge is using non-traditional data, such as social media footprint, mobile data, GPS logs and other fumes from the digital exhaust to get a score to help a lender decide if you are creditworthy.

Eldridge says the technology uses an algorithm that crunches an individual’s digital exhaust.  For example, if a person says he runs a shop in an area, his GPS records will show his travel details. Does he actually go most days to the location of his shop? Does he actually live where he says he does? A peer-to-peer lender I met a few months ago said his firm uses social media accounts to verify things like date of birth. Have people wished the guy on his Facebook page on the date he has given as date of birth?

The author of article finds this method intrusive? Some of the data collected is consent-based, but there are other firms who control your digital exhaust through the boxes one ticks when you download free apps and through other ‘free’ offers via email.  In the time to come, the issue of ownership and control of our digital exhaust will become centre stage.

The fintech genie is out of the bottle and will be put to uses good and bad. The rush of tech is so strong that rules will always be a step behind. For the financially excluded, handing over their digital exhaust to firms, which will enable them to access finance, will do what banks have been unable to do for decades. For the rest of us, thumbing away on the apps and occasionally looking up to worry about the safety of our exhaust, it will take few accidents for some rules of the game to emerge. Till then be careful of what you tick. And be good!

This is an excerpt from an article published on