MicroMoney: The Future of the Credit Bureau’s industry

Dan Khomenko, Australian Government Officer, MicroMoney’s advisor

Bitcoin and ether are two highly disruptive cryptocurrencies looking to leverage blockchain technologies to drive innovation across numerous industries. However, these two currencies are not the only things that blockchain can offer to bring the innovation to the world. MicroMoney is a market pioneer blockchain credit bureau and in this article, we will try to prove that this business model can change the financial market giving the alternative way to lend money.
MicroMoney is a stable and mature business that has been successfully operating since 2015. To understand MicroMoney’s business model we firstly should understand the meaning of the Credit Bureaus. What are they actually doing?
A classical credit bureau is a company that collects and maintains individual credit information and sells it to lenders, creditors, and consumers in the form of a credit report. The credit bureaus maintain many personal details related to a customer and credit history, starting from the time he or she opened a first credit account. For instance, the credit bureau collects your repayment history, the amount of credit you have available, and the amount of credit you are using now, outstanding debt collections, and details on public records like bankruptcy, tax liens, foreclosure, and repossession.
Typically, almost every mature country have several credit bureaus: e.g., the US has four of them, India, and the United Kingdom – three, Russia has 18, and many Asian countries have none of them.

Where Do Credit Bureaus Get Information?
Credit bureaus depend on banks and other businesses who provide them with consumer information. Many of the companies you do business with are sending regular updates on your open accounts. Credit bureaus also get information about you from public court records and use various sources for obtaining data so your credit report may vary slightly from bureau to bureau. Entire accounts may be missing from your credit report.

Who Uses Credit Bureau Data?
Banks and credit card issuers are the most obvious users of the information provided by credit bureaus. A host of other companies turns to credit bureaus to make decisions about you. Employers, insurance companies, property owners, and debt collectors are interested in requesting information about their customers.
Credit bureaus provide pre-screening lists to banks and insurance companies to help these companies decide which consumers may take advantage of their products. Credit card issuers, for example, may request a list of consumers with high credit card balances to send these consumers offers for balance transfer credit cards. If you have ever wondered how pre-approved credit card offers wind up in your bank account or how banks know to offer an unsolicited refinance on your mortgage, this is the answer.
Of course, services are not free and not cheap, especially for the mature markets. Every time you get a loan or credit card offer from any bank, you should be sure this bank has already paid for a request about your credit history. The average price per a customer in the US is $10-100 and up to $300 sometimes in European countries. Moreover, these costs do not include any other expenses to attract you as a client – for adverts, promo campaigns, etc.

What is so special about MicroMoney then?
Here is an exciting part: MicroMoney is an Open Source Credit & Big Data Bureau that connects new customers to all existing financial services hundreds times cheaper. MicroMoney A.I. platform uses complex algorithms to predict creditworthiness of all customers and in just 15 minutes a borrower can get the very first loan in his/her life just from a smartphone. All customers have an ability to pay less interest and have a higher credit rating if they use our platform more often. All aggregated Big Data and Credit Histories are stored on the Blockchain. Thousands of existing businesses will get access to millions of new customers that we will bring to the global economy.

What problem does MicroMoney try to solve?
Over 2,000,000,000 people around the world simply do not have any access to financial services. The main reasons for this are lack of credit histories and cash-oriented operations they are forced to support without any credit rating. If you think about it, this is a marvellous amount of a new data and a substantial number of new potential clients that are simply being ignored by the established banks in the first world countries. Financial institutions do not have any information about these clients and their creditworthiness. However, some technologies can bring this data about the untapped audience to the market. Despite the lack of financial information, these people still use many different technologies including their smartphones and social networks consistently.
China now in 2017 has 731 million internet users and 95% access from their phones, with 53.1 percent of the population online. The country shows a fast development pace but still has 21% of unbanked. India now is the world’s fastest growing Internet market with user base grew by 51.9% in 2015. However, India's unbanked population would be the world's 7th-largest country. A report prepared by PricewaterhouseCoopers India in 2015 pointed out that India’s unbanked population that year was 233 million.
MicroMoney designed its own way to get these data from smartphones and social networks and to give the access to the global economy opportunities to billions of the undiscovered unbanked worldwide.

Why it’s a smart idea?
Clearly, MicroMoney solves many problems that traditional banks are not even trying to solve: the company provides an opportunity to people to have their first credit history that can later be used as an evidence in any other classical financial businesses.
In what way? MicroMoney has developed a unique scoring system for rapid assessment of a client’s creditworthiness. Relying on Big Data, neural networks, AI algorithms, and machine learning it has the functionality to approve the very first loans for unbanked people and this way creates their credit histories from scratch a hundred times cheaper than traditional banks. At the same time, financial and other companies get the access to this credit rating database on a fee basis, allowing them to receive a list of reliable and already assessed customers ready to consume their offers.

Now in this company and, I hope, everywhere in the nearest future, the unbanked person doesn’t need to collect a number of paper-based documents, a collateral and a person to vouch to confirm the ability to repay. He or she just installing the MicroMoney mobile app on a smartphone and completing a loan application within it. Then the scoring self-learning system analyses the data available from the borrower's smartphone and identifies potential credit risks with an accuracy of more than 95%. In a few minutes program makes a decision whether a loan should be approved or not, and sends money to a customer’s e-wallet if the answer is yes.

The smart scoring application allowed MicroMoney to build a new niche for a lending market with very fast procedures of applying for a loan, customer’s assessment, loan application approval, and sending the money to a borrower. The fact that almost every process is transferred to online gives the company critical advantages in comparison with what banks and lenders using classical scoring procedures have.
However, the company is going to start its token distribution campaign on 18th October 2017 to attract funding for the business development and, in fact, to create the system, where it’s own token circulation would be native. This can be made only in the ecosystem, which connects MicroMoney with the other financial organization, customers and other businesses using AMM tokens, and provides social interactions between all these groups.
The company has a solid base to start building this new system with its mature 2-years old business in five Asian regions (Thailand, Cambodia, Myanmar, Indonesia, and Sri-Lanka) and plans to launch in five more countries in the upcoming several months. MicroMoney processed more than 95,000 unique customers already, got more than 500,000 likes on Facebook. Nine customers out of ten took the first loan in their lives and 73% of these people came back for a new one proving that this method to solve the problem of financial exclusion is effective