Leveraging alternative data to provide loans to the unbanked 

The service helps pillars of the community access financing that would otherwise be denied

Spotted: Financial inclusion is integral to the achievement of seven of the 17 global SDGs, and the World Bank says in its 2021 report that between 2011 and 2021, “Great strides have been made toward financial inclusion.” However, despite a significant increase in the number of people accessing bank accounts, around 24 per cent of the global population remain unbanked.  

Particularly for minority groups such as immigrants, the ability to access formal financial services is made exponentially more difficult by their lack of permanent address, loss of employment, and gaps in tax records. For small business owners – many of whom provide an essential community service – a lack of formal accounting records, along with any previous time spent unbanked as individuals, contributes to a dearth of information traditionally used to evaluate risk for loans.  

To tackle this issue, US startup Uplinq provides lenders with a ‘credit-assessment-as-a-service’ solution that takes into account the entire business ecosystem, and therefore billions of data points that would not traditionally be examined by underwriters considering a traditional loan application. From supplier references and store traffic to community involvement and property improvements, Uplinq provides a holistic and accurate assessment of the “opportunities, challenges, and interests of each prospect” within “known confidence ranges.” By working with independently audited and fully regulatory-compliant data sets, Uplinq’s services are available worldwide.  

Other innovations that Springwise has spotted that are helping unbanked communities include a Spanish language-first bank, and a free digital learning platform to help underserved communities understand how to better manage their finances.

Written By: Keely Khoury