The Power of Texting: Creating Credit Scores With Mobile Tech!

Competition Finalist

This entry has been selected as a finalist in the
The Power of Small: Entrepreneurs Strengthening Local Economies competition.

At InVenture, community is at the core of why we do what we do. On the outside, we’re a company providing financial literacy and credit scoring to unbanked entrepreneurs in emerging markets. While this alone is something to be proud of, we have found that we are motivated most by our belief that the work we do fosters a community of purpose and possibility.

About You

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About You

First Name

Patrick

Last Name

Furlong

About Your Organization

Organization Name

InVenture

Organization Website

Organization Country

United States, CA, Santa Monica, Los Angeles County

Country where this project is creating social impact

India, KA

Age of Innovator

18-34

Gender of Innovator

Female

Is your organization a

Hybrid

How long has your organization been operating?

1‐5 years

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Innovation

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Name Your Entry

The Power of Texting: Creating Credit Scores With Mobile Tech!

Select the stage that best applies to your solution

Growth (your pilot is up and running, and starting to expand)

How long have you been in operation?

Operating for 1‐5 years

The Need: What problem are you trying to solve?

As the rate of micro-lending continues to increase, microfinance portfolio risk worldwide has also increased. The increase in defaults and administrative costs is in large part due to the lack of reliable ground-level data. Higher default rates can result in higher costs of credit for micro-borrowers. Greater transparency is needed for microfinance institutions (MFIs) to mitigate loan risk and approve micro-borrowers who fit within their program parameters.

The Solution: What is your solution? Be specific!

InVenture is pioneering a standardized credit scoring system for unbanked individuals to qualify for financing -- something more than 2.7 billion individuals lack. Currently, there is no other organization in the market providing financial literacy, accounting and credit scoring through a text-messaging platform. The data captured by our product InSight will help us understand how bottom-of-the-pyramid (BoP) individuals, households, and businesses manage money. InVenture then provides the education, financial metrics and partnerships to revolutionize the low-income financial service industry.

InSight provides entrepreneurs a convenient, easy to use tool accessible through any text messaging cell phone that provides them financial literacy and accounting assistance. We are also able to use the data we get from these entrepreneurs daily entries, and create a unique credit score for them that banks and microfinance institutions use to provide credit to previously unbanked people.

The Model: Walk us through a specific example of how your solution makes a difference; include your primary activities

No download is required to use our mobile application—it works entirely over SMS. This makes the app accessible to borrowers in the developing world who do not have smartphones or computers. Use is simple: it only requires sending a single daily SMS to our local access number.

Using a basic combination of numbers this message records expenses and revenue for that day. A message of “2000 1000” indicates 2000 INR of income and 1000 INR of expenses. If interested, the user can also use a basic key of letters and numbers to enter more detailed information about the nature of their expenses—whether it has been spent on food, travel, etc. Whether it is a basic revenue and expense report or a more detailed budget, the information in the SMS is routed through an SMS-gateway to InVenture’s cloud database. After the database receives this information, it replies with an SMS confirmation of what the user reported.

Users can view their aggregated income and expense information by sending simply “0” to their access number. The reply to this message is an SMS stating weekly income, expense and profit information. Finally, a user can request help by sending “00”. A staff member calls that member to answer any questions. InSight currently works in eight languages: five Indian dialects, French, Spanish and English.

The Marketplace: Who are your peers and competitors? Identify others also working to address the needs you are and what differentiates you from them. What challenges could these players pose to your success or growth?

Our main challenge is the current lack of accounting and financial literacy. Currently, there are no direct competitors.
Potential competitors include First Access (Tanzania) and Micel (Mexico). InVenture’s focus on combining real-time
accounting and demographic data provides clear differentiation and a market advantage from our competitors.

Social Impact

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What solution(s) does your initiative address to help emerging entrepreneurs and small businesses grow and thrive in underserved communities? (select all applicable)

Access to financing, Access to technology, Access to economic opportunity.

What has been the impact of your solution to date?

InVenture is currently providing InSight services to two lenders and five NGO partners. InVenture is currently charging these institutions for portfolio servicing and lead generation. InSight is helping these organizations better manage the risk of their portfolio while helping the entrepreneurs using the product attain greater financial literacy and accounting acumen to help them manage their business. Our first group of users will soon complete their initial lending periods using the technology, and we'll then have an even better idea of how much their savings and revenue grew.

What is your projected impact over the next 1-3 years?

InSight has the ability to transform the finance services industry by increasing
efficiency, reducing costs and risk and has the potential to lower interest rates
across emerging markets. Additionally, through the use of InSight, individuals
have increased revenues, higher savings and financial literacy rates.

InVenture is initially targeting the Indian market with 30.1 million micro-
borrowers. By 2016, we plan on reaching 30 million users on InSight across
emerging market countries.

Three years from now, we'd like to see individuals who use InSight growing their business, and finding access to more affordable forms of credit than before they worked with us.

What barriers might hinder the success of your project? How do you plan to overcome them?

Financial literacy classes are conducted by a local InVenture employee. The curriculum includes basic financial vocabulary, how to categorize different kinds of expenses, and how to calculate revenue, loss, and profit. After providing this foundation of financial understanding, students are taught how to use the InSight SMS application to maintain financial records.

We partner with already-established NGOs and self-help groups and with with women who are community leaders,well versed in using InSight and are responsible for ensuring that the users in their area report regularly and accurately. Dependant on familiar local trusted networks, our product-delivery system allows for InSight to have greater and lasting traction in a community.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

In six months we want to have 10,000 users on InSight gaining financial acumen and better access to credit.

Identify three major tasks you will have to complete to reach your six-month milestone

Task 1

We will be hiring field staff to manage on the ground programs far away from where our staff is located.

Task 2

Expand financial literacy trainings from one time sessions to recurring sessions to ensure users grasp the concepts.

Task 3

Create a web portal that will help us manage the transparency that is needed when we go to find 10,000 users.

Now think bigger! Identify your 12-month impact milestone

In one year, we want to have 40,000 users utilizing InSight.

Identify three major tasks you will have to complete to reach your 12-month milestone

Task 1

We will be hiring someone with a high level of experience in business development to be our business development director

Task 2

We hope to partner with an MFI to enter the market in Kenya.

Task 3

We are looking to create ten new MFI and bank partnerships.

Founding Story: We want to hear about your "Aha!" moment. Share the story of where and when the founder(s) saw this solution's potential to change the world.

Working for the United Nations Population Fund, Shivani got a chance to go into the field and talk to microfinance borrowers, and really learn about their daily lives. Does your daily life feel better as a result of these programs? What Shivani found was that most of the time the answer was no, their lives weren't getting any better. She started InVenture as an organization that would crowdsource funds to invest in a business but a year ago, we saw that was also lacking. Maybe what India needed wasn't more loans, but rather smarter access to manage that capital.

There is an entire layer of companies that are below small and medium enterprises, they're micro enterprises. People often don't believe these businesses can really grow. Maybe we can't value them the same way we do a corporation, but there is value and potential there! She started InVenture to give people an opportunity to enter formal financia markets, receive better loans, and learn smarter ways to manage finances.

Sustainability

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Tell us about your partnerships

We have a few partnerships with NGOs on the ground in India: Unnati, Ashwini Mahila Snagha, IYD, and Vistaar. Working with these nonprofits will give us greater access into the communities we want to work in. We will be training the NGO's in the use of InSight, and those NGO's will be able to serve as support for the entrepreneurs that decide to use InSight. We are exploring other partnerships with other groups working on the ground in India, as well as Kenya.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

We are always looking for ways to fund and publicize our innovation. The most important idea of InVenture Foundation is to provide opportunity for entrepreneurs that other organizations deem too risky to work with. We strongly believe in providing access to credit, and providing that access alongside financial literacy training.

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67 weeks ago Khushboo Sharma said: I was going through the same problem few months back , then i consulted credit sudhaar ,they helped me in paying my debt and also ... about this Competition Entry. - read more >
72 weeks ago Sudhir Lal said: "I thought I had settled and finished my problems. But the banks still were refusing me loans ! I got in touch with Credit Sudhaar( ... about this Competition Entry. - read more >
98 weeks ago Ami Gosalia said: Peter, Thanks! Great questions. 1. 350-850 is our range. The banks and MFIs that have worked with us so far recognize that we've ... about this Competition Entry. - read more >
98 weeks ago said: Hello Patrick, Thank you for sharing this project with me. You have my vote! I had a couple of questions: 1. What are the range of ... about this Competition Entry. - read more >
99 weeks ago The Power of Texting: Creating Credit Scores With Mobile Tech! has been chosen as a finalist in The Power of Small: Entrepreneurs Strengthening Local Economies.
103 weeks ago Tim Scheu said: Thanks, Patrick. That's really helpful! about this Competition Entry. - read more >
103 weeks ago Ami Gosalia said: Tim, Thanks for the question! I've had some problems posting back, so hopefully this one goes through! Briefly, we have a team that ... about this Competition Entry. - read more >
103 weeks ago Tim Scheu said: Patrick - Thank you for sharing all your exciting work w/ InVenture and InSight. It seems like a much-needed addition to the MFI ... about this Competition Entry. - read more >
107 weeks ago Ami Gosalia updated this Competition Entry.
107 weeks ago Ami Gosalia updated this Competition Entry.