Microfinance is a service where financial institutions
back small start-ups and would-be entrepreneurs with small loans,
oftentimes referred to as microloans. Such initiatives are most popular
in the poorest parts of the world.

In this business model, big
data is used to assess a customer’s creditworthiness. Big data is
defined as large volumes of structured and unstructured consumer data
that can be gathered from a user’s entire profile of online activity, be
it on social media platforms, product purchases, or electronic
check-ins.

Such data is usually collected from various data
points, which vary according to the type of online activity performed.
An example of this is phone usage data which includes call duration as
well as the frequency of calls.

It is this kind of data that will
then be used to assess a customer’s ability to repay a loan provided via
a microfinancing scheme. What is used is not the direct content of the
data, but rather the behavioral patterns associated with the data
collected.

Big data analytics is an increasingly integral part of
the tech ecosystem and is fast disrupting the financial services
industry as well. The ability to transform raw data into meaningful
insights is the cornerstone of cross-industry development.

Mansoor Ahmad
https://www.linkedin.com/in/mansoornano/

The Data Standard
https://datastandard.io/
https://www.linkedin.com/company/the-data-standard/
https://www.youtube.com/channel/UCTuolowXD05RY9DkIWqRT6Q