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Lot of Contacts in Your Mobile Phone May Get You Loans

  • Alternative data unlock 2 billion borrowers in poor nations
  • Startups offer new approach to creditworthiness in big market
People use their mobile phones while waiting to board a ferry boat in Abidjan, Ivory Coast.
Photographer: Jose Cendon/Bloomberg
Updated on

They have no bank account, no credit score, no financial identity. So a quarter of humanity hasn’t been able to borrow money. Until now.

Several dozen startups say they have developed ways to bring those 2 billion people into the international financial system, monitoring cell phone use and other personal habits to predict creditworthiness. For example, people who don’t let their phone batteries run low tend to do the same for their debt balance. Borrowers who get more calls than they make are better risks, and applicants who state their loan purpose in a few words are better borrowers than those who end up writing an essay.