08 August 2017 10:10:43 IST

An app that finds out how bankable are the ‘un-banked’

Confirmu uses alternative methods to build the credit profile of those outside the formal system

Yatir Zaluski had developed a mobile app to help un-banked customers or those with no credit history build a credit score and get funds from the traditional banking and finance system. He realised that his home market, Israel, was too small and that he would be better off targeting larger markets such as the BRICS – Brazil, Russia, India, China and South Africa.

His venture, Confirmu, is just seven months old and he says he realised the need to build credit scores for the un-banked when his family wanted to rent out an apartment in Israel. During the screening process, he recalls, his family saw many potential tenants who were wearing fancy clothes, but did not have bank accounts. His family was weary of letting out the apartment to such people, he recalls. He then realised that there was a business opportunity waiting to be tapped. Just because someone did not have a bank account did not mean they could not be trusted. So, he established Confirmu, which went about developing an app that uses alternative appraisal methods to build a credit score for the un-banked.

It is thanks to the efforts of Polynation Ventures, a platform that seeks to promoter greater collaboration between Israeli and Indian companies, that Yatir, a Certified Public Accountant, was able to get in touch with Ebrahim Sayyed, based in Mumbai and with years of experience in financial risk management, to kick off operations in India. Yatir and Ebrahim had known each other for almost a year, having met at fintech events.

Confirmu, according to Yatir, Founder and CEO, is a data analytics company that uses alternative methods to not only help build a credit score for the un-banked but also help lenders determine their intent to pay. Explains Ebrahim, Chief Product Officer, Confirmu has built an algorithm that uses free text captured through artificial intelligence powered chatbot and measures the intent of the borrower. This helps lenders predict the type of borrower and the amount of risk being undertaken.

Also, Confirmu has built algorithms that answer traditional underwriting requirements without physical documents on employability, debt to income ratio, expense management and average time spent at any location. Each of the appraisal methods carries a different weightage and accordingly the risk profiling is done and premium priced.

Confirmu, according to Ebrahim, is doing beta tests of its product and working on adding features supporting regional languages. It hopes to launch the product in three months. Yatir says the large number of smartphone users in India, especially in villages, offers Confirmu a big business opportunity to sell its product to lenders.

Global plans

Confirmu is working with three Indian lenders and one in Brazil and is in advanced discussions with an NBFC towards customisation in India and one of them in New Zealand.

According to Yatir, the venture is looking to raise about $750,000 for global expansion. A bulk of this money will be invested in India as the customer base here is much larger than in other countries the venture is targeting. Ebrahim has a 30 per cent stake in the venture and the Indian company, Confirmu India Ltd, is in the process of being incorporated.

(The article first appeared in The Hindu BusinessLine.)