Moneta is a lifestyle based financial service enabler with a vision for a financially inclusive society. It was the first startup in Sri Lanka invested by Google for Startups programme and PickMe in 2019. The startup closed its Seed II funding round towards making this vision a reality, raising $325,000 at a valuation of $1.25 million. This successful funding round was led by the Canadian Strategy Investment Group, Remitbee, VelInvestment Holdings, and Digital Mobility Solutions Lanka.
Having navigated the challenges of the COVID-19 pandemic, CEO of Moneta, Shayanthan Kanaganayagham, stated, “We’re happy to have surpassed our own goals for this round of funding. Now, our focus is to upgrade our digital platform by leveraging AI/ML and big data. In doing so, we aim to move forward towards achieving our mission to increase financial inclusion in Sri Lanka and across the South East Asian region.”
A Network of Social Trustworthiness created by Moneta
Towards its mission to improve financial inclusion, Moneta is focused on removing barriers to accessing financial resources. However, you’ll find in its home of Sri Lanka and across South East Asia, those that need to access such resources the most are unable to do so. On the surface, it’s because the traditional financial institutes do not have a way to understand the creditworthiness of the economically active, Informal Sectors Employees. Even in Sri Lanka, more than 60% of the 8.2 million working population is under the Informal Sectors Employment.
In a developing country, this issue runs deeper. To understand it clearly, one needs to look at how credit is offered. At present, banks in Sri Lanka rely on the Credit Information Bureau (CRIB) information as the major source to assess a customer’s creditworthiness. However, this creditworthiness is dependent mainly on the availability of existing data of the credit usages as a means of establishing trust.
As per Shayanthan, “The information provided by the CRIB assesses creditworthiness utilising data within the banking system. However, a vast population in Sri Lanka are considered credit risks simply because they’re among the Informal Sector Employment category and their credit-related economic activities are rarely recorded into a banking system. But by expanding the data source beyond the banking system, financial institutions can utilise several other important factors to assess creditworthiness, establish trust with borrowers, and enable informed lending decisions.”
Shayanthan outlines that Moneta adopts data-centric machine learning models and leverages advanced AI to determine social trustworthiness and customer credit risks. Their algorithms include analysis of lifestyle, intentions, timeliness of credit repayments, the credibility of the customer’s network, and many other indicators to create every user’s digital DNA.”
Accordingly, Moneta can use this to help customers improve their credit scores and create a more financially inclusive society. In addition to receiving instant loans through the platform, Moneta offers other credit products such as buy now, pay later schemes and EMI payments for lifestyle purchases. Furthermore, the app reminds users of upcoming payments to minimise the late transfer of funds that could, in turn, affect their credit score. In doing so, the user’s credit score improves, and the platform unlocks new features for the user with its highly trusted network of partners.
Access to credit affects individuals’ experiences of inequality. Having universal access to credit enables those to consume an array of products and services that they otherwise would not be able to afford. As Shanyanthan states in his own words, “Moneta acts as your trustworthy companion who helps you out financially in a time of need and smooths out your class and status differences.”
The growing need for financial inclusion
The ongoing crisis spurred by the COVID-19 has made a critical case for improving financial inclusion. In developing regions, long lines in front of pawnshops and other lenders weren’t an uncommon sight. As governments announced strict lockdowns, low-income individuals were desperate for any financial assistance to obtain daily essentials for survival. Such scenes have now more than ever highlighted the need for a more financially inclusive credit system for the pandemic-stricken public.
When the pandemic struck, Moneta’s operation was drastically hit when the COVID-19 pandemic struck. Overcoming the challenges, Shayanthan expressed the team worked on updating their machine learning models to adjust for the previously unseen factors resulting from the pandemic. “For the wellbeing of our customers, we provided them a debt moratorium during this challenging time, in line with the guidelines set out by the Central Bank of Sri Lanka, and make sure its customer-centric approach” conveyed Shayathan.
But if one addresses the root causes of the issues, Moneta’s solution holds great promise. “The assessment system at Moneta cuts down the expensive traditional process of risk assessment and brings benefits to the people by making credits cheaper through lower credit serving costs,” conveyed Shayanthan. Additionally, he stated there is a saving in human capital using digital methods for risk assessment.
Hence, Moneta’s data-driven approach to lending results in financial institutions not only speeding up the process of approving credit. It also makes capital accessible to more individuals who can utilise it to build a better life for themselves and their families. With this, a boost to the economy is to be expected by adopting the Moneta credit system for other sectors such as insurance, healthcare, and employment.
What’s next for Moneta?
As of September 2021, Moneta has over 65,000 registered users on the platform and takes pride in a recovery rate of 96.45%. “This figure is a clear indication that we are headed in the right direction by outperforming traditional banks in terms of our NPL ratio,” Shayanthan expressed. Having closed its Seed II funding round, Moneta’s next growth stage involves forming partnerships with financial institutes to enable more credit-related products to consumers. Furthermore, leveraging their newfound international recognition, the team at Moneta also intends to take the platform overseas to other countries in South East Asia, showing the regional market that the time for financial inclusion is now.