Granting micro-loans based on social reputation has given Sterling Bank in Nigeria access to a new, previously unexplored, channel of customers in the youth demography through social media. This is according to Chimaobi Nwaokoma, head of Branding and Communication at Sterling Bank.
Nwaokoma is satisfied with the method used by Social Lender to provide a Social Reputation Score for potential clients by leveraging from data provided on social media and the Internet. Kelvin Igbodo, Head of Strategy and Communications at Sterling Bank, adds that this new channel of customers proved to be trustworthy in faithfully paying back their loans.
“By using Social Lender we are now reaching out to a younger audience that do not have a credit record and sufficient data to be granted a loan through our normal loan application process. We are now able to reach out to people we have never been able to reach before,” said Kelvin.
Since Sterling Bank partnered with Social Lender two years ago they have gained 200 regular customers that would not have been granted a loan in the past. So far the bank has received over 1700 micro-loan requests through social media, which have been successfully screened by Social Lender. Nwaokoma explains that the processing of these micro-loans can be done over a very short period of time, enabling the bank to grant loans faster and to grant more loans.
“Our normal bank loans takes a week and longer to approve, depending on the type of loan. Social Lender loans are normally granted in less than an hour, but no longer than a day.”
Nwaokoma said using social reputation to grant micro-loans helps Sterling Bank to communicate more innovatively.
“Social Lender is adding value to the Sterling Bank by enhancing new innovative partnerships with clients,” said Nwaokoma.
“Our banks even won innovation awards because of Social Lender,” Nwaokoma added.
Nwaokoma said that using social reputation to grant or reject loans has worked with this product and the level of risk involved.
“Social Lender’s service is definitely adding a lot of value to our bank overall.”
