At some point in our lives, we’ve all been involved in a financial emergency. For many including middle-income families, this became a painful reality in the wake of the coronavirus. Unfortunately, access to financial resources remains to be a challenge. Often simply due to a lack of collateral by those who need it most. But the deeper underlying issue to build trust between financial institutions and individuals. Collateral has been the go-to approach for years, but in the age of data, there are other ways to build trust.
This is the issue that Moneta, which describes itself as a lifestyle based financial service enabler, aims to solve. Having obtained seed funding through the Google Startup Accelerator and PickMe Incubation programme, Moneta created a credit scoring engine that harnesses data to understand individual ‘social trustworthiness’ it aims to offer personalised financial assistance for middle-income consumers. In turn, allowing them rewards and financial facilities to live beyond their limits in life.
Describing the problem, CEO of Moneta, Shayanthan Kanaganayagham explained, “Each of us has varying financial needs at different times. In the traditional setting, building trust and getting access to finance that meets our personal needs is very limited and a time-consuming process. But what if we have a good discerning friend who has a deep understanding about our needs, lifestyle and trustworthiness and enables us with a high trusted community and financial facilities whenever we need it in a super fast way. Our life will be sorted!”
Building trust and access to credit
To understand the challenges of obtaining credit we need to visit how it’s given in the first place. In Sri Lanka, financial institutions rely upon the information provided by the Credit Information Bureau of Sri Lanka (CRIB) to make trusted decisions about customers when offering access to credit. The agency, which operates as a private-public partnership, was established in the 1980s to ensure financial institutions had readily available access to credit information. In turn, ensuring good credit culture and clean credit.
To achieve its goals, the agency maintains a growing database of credit information. It contains records of all financial borrowing of an individual. Banks and other financial institutions rely on this database by consulting CRIB to identify the creditworthiness of an individual before making any lending decisions. If your credit history looks positive then there’s nothing to worry about. Otherwise, you’ll find the entire process from obtaining to repaying credit to be challenging.
But as local startups and many others recently found, the system isn’t necessaril perfect. “Only considering the creditworthiness as a single dimension, is insufficient for speedy, effective, and personalized financially inclusive decision making.” Recognizing this, Moneta turned to technology to make credit more accessible to middle-income consumers.
Moneta’s solution is a proprietary multi-dimensional credit scoring engine. It works to understand individual ‘social trustworthiness’ through a highly trusted network of people. By formulating this ‘social trustworthiness’ credit scoring, Moneta provides a rapid credit facility called MoCredit.
Describing the service, Shayanthan said, “Unlike credit cards which only make sense when you consistently earn a hefty income, MoCredit can be usable by pretty much everybody based on their social trustworthiness score. By utilizing technology, we’ve made credit more widely available to consumers in more places to use it whenever and wherever they choose. In turn, enabling them to live beyond limits.”
How Moneta works
Currently, Moneta is available in the form of a mobile app. As soon as users download and set it up, the app offers Rs. 500 worth of credit, which can be used immediately. By adding their identity and employment details, the app unlocks more benefits with greater flexibility. The degree to which is determined by Moneta’s data-centric machine learning models, which use AI to determine the ‘social trustworthiness’ of users. It’s a constant process analysing lifestyles, timely credit repayments, social trustworthiness of the user’s network and other dimensions to improve the social trustworthiness of users.
The personal credit limit of a user through MoCredit adjusts based on changes to your credit score. Much like other services, the responsibility on customers’ hands to maintain good social trustworthiness. In turn, enjoying the full benefits of Moneta and its partner networks. “Moneta is like your close friend, who builds trust in you by understanding your lifestyle in-depth and enables you into the high trusted networks to get more facilities which are currently not accessible to you. If you develop mistrust with your good friend you will lose the benefits from all his networks” states Shayanthan.
Currently, MoCredit has three use cases. The most common use case is obtaining a cash advance of up to LKR 100,000 based on individual credit score. It can also be used as “Settle now, Pay later” bill payments. A third use case is to purchase lifestyle products on EMI.
Through the app, you can select the amount you require. It is absolutely free if you borrow and repay a cash advance up to Rs 10,000 in 15 days. You only need to pay an extra Rs 50 for transferring the money to your bank account. If needed you can request a higher amount through the app, where there will be a few additional charges, but if the repayments are made timely, Moneta states no additional fees will be charged. Once your request is approved, the money is deposited into your bank account.
Moneta’s plans for the future
Sharing their plans moving forward, Shayanthan shared that Moneta is focussing on forming partnerships with financial institutions, merchants and lifestyle service providers. With merchants, it hopes to offer more credit-related services; and through financial institutions, the company aims to offer better and personalized financial products for different use cases; and through lifestyle service provider partners, Moneta plan to provide priority access and valuable rewards to social trustworthy customers, and enable their life beyond limits.