In support of our mission to economically empower the emerging middle class, Lenddo was recognized as one of the top 15 most innovative global financial services at Sibos in Osaka, Japan. Sibos, an annual conference organized by Innotribe which is the innovation arm of SWIFT, brings together a consortium which represents 8,000 financial institutions. At Sibos the finalists showcased their innovations to a network of VCs, angels and professionals from the banking industry. We here at Lenddo would like to commend PlayMoolah and Gust who have been awarded “Top Startup” and “Top Innovator” respectively. We were honored to be a part of such a high caliber group of companies who are disrupting traditional models of finance and banking through new and innovative means. Congratulations to all the companies recognized as FinTech innovators:
OpenGamma - http://www.opengamma.com
Pendo Systems – http://www.pendosystems.com
The Currency Cloud - http://www.thecurrencycloud.com
Claveo Software – http://claveo.com
DemystData – https://demystdata.com
Digital Shadows – http://www.digitalshadows.com
Funding Options Ltd – http://www.fundingoptions.com
NestEgg – http://www.nestegg.co.uk
P2P Cash Technology- http://p2pcash.com
PhotoPay – http://www.photopay.net
PlayMoolah – http://www.playmoolah.com
Snappay – http://www.snap-pay.com
XYverify Corp.- http://www.xyverify.com
Below, Lenddo founder Jeff Stewart thanks Dr. Yunus for his pioneering work in microfinance that provided the inspiration for Lenddo.
Groups and cooperatives have been microlending for hundreds of years. One of the larger and most popular programs was called the Irish Loan Fund. Started by Jonathan Swift in the 1700s, the fund provided loans to low-income families in rural areas. Swift recognized that individuals with no credit experience and little collateral could still be considered creditworthy. By the 1800s, more than 300 programs throughout Ireland were loaning small amounts of money for short periods of time. It was estimated that at the peak of this loan period, 20% of all households were utilizing the program.
Over the years as banks and institutions continued to expand, their business models forced them to focus on loans to profitable pools of candidates. It became harder, if not impossible, for the underprivileged to access the loan market. In 1983, a visionary by the name of Muhammad Yunus defied social norms and against the status quo, founded a bank focused on providing the poorest of Bangladesh with very small loans. Based on the belief that credit is a basic human right , this concept of solidarity lending evolved. By leveraging social capital, lending through solidarity groups forces the group to assume moral responsibility for the loan and thus serves to support the broader objectives of lending.
So while the concept of microlending is not new, the idea of accessing it through new borrowers are beginning to gain access through innovative ways. On its platform, Lenddo Members are invited to form a Trusted Network of friends and family members who attest to their credibility and, in turn, their creditworthiness. Lenddo then interprets the quality of this network through its proprietary algorithms and makes quick credit decisions when our Members most need capital.
Lenddo’s model for providing credit is akin to the Collaborative Consumption trend that is disrupting traditional models of business and reinventing what and how we consume. Effectively, it is helping to replicate access to an age-old business model of microlending through new-world means of technology and social media. USA Today calls Collaborative Consumption ‘America’s new business model sharing’. In 2011, Time Money magazine named Collaborative Consumption one of the ‘top 10 ideas that will change the world. ‘ Already, Lenddo’s ability to extend life-improving loans to our Members in the Philippines and Colombia demonstrates the power that can be harnessed through collaboration.
When Lenddo started operations in the Philippines in March 2011, we wanted to empower the middle class. We didn’t know what we would find at first, but knew that the country’s economy and population was growing. The country has a large youth population that will contribute to continued economic growth in the future, with over 60% of the population at 30 years old or under.
As the country is currently going through a baby boom, it turns out that Lenddo’s services are attracting young parents as the average age of our Members is 33 years old and has one child. People in this age group are more inclined to save money and make large purchases that are investments into the family’s future like education.
Lenddo allows our Members to leverage their social networks to gain access to loans for life improving purposes. These short term loans help Members finance purchases or expenses they would otherwise not be able to make without overburdening them with debt – as the average loan size is only half of one month’s wages. Many of our Members come to Lenddo to take out loans for education or for home repair after a major storm. Some of them even borrow to help repair or improve their parent’s homes or to send their brother or sister to school.