Friends List, Big Data and Loans
In the West, they have credit ratings for individuals. There are systems that keep track of your repayment record (electricity bills, credit card bills, EMI’s paid, outstanding loans etc). Your track record is then referred to when you apply for that loan or an increase on your card limit. India too has started building similar systems (like CIBIL). But what about poorer countries with no such systems? Or immigrants with no credit record? The Economist reports that lenders are beginning to look at social networks to refine the credit ratings of potential borrowers: - Like your LinkedIn contacts could act as a cross-reference about your job (do you have many contacts from that job you claim to have? How good do your contacts think you are at your job (this acts as a hint of how long it might take you to land a new job should you get laid off); - Or your Facebook data ca...