So if you were to think of some of these African countries and then go into Rwanda, you will understand that the credit growth and maturity is fairly new outside of South Africa, most of these African countries had predominantly been cash-driven markets, it's not to say there wouldn't have been a form of lending or products that would have been there. But if you think of the South African credit market or maturity curve, you know, retail, for instance, people go and buy clothes on credit, you have never seen that in any of the African markets, they get a shock to hear that you buy clothes on credit. So there's still a lot of whitespace, there's still a lot of opportunities for better products to come into play. So personal loans have predominantly been the default lending product that we've seen in the market across all the financial institutions in Rwanda.

But now mortgage, your typical mortgage, right? It's starting to emerge as a product, that historically people would probably just get a personal loan and go buy a plot of land and try to, you know, use their own income to build a house for themselves. What you have started to see off the lead is vehicle financing starting to come up in Rwanda. I'm not sure how close you are to the VW project that kicked off, I think, a couple of years back where they had a factory and wonder and assembling factory and wonder, because outside of South Africa, maybe with the exception of Botswana and Namibia, most of these countries do a lot of great imports. Right? So you find a lot of Japanese cars out here, right? So with that said, vehicle finance, the process of it has been much of a challenge because the bank doesn't know the vehicle, they're financing, they don't have confidence on the quality of the vehicle, right?

We don't like to say it's a small country actually, and we just held the NATO summit in Vilnius in July, so we had a very nice ad: Lithuania is not a small country, it's a big country compacted to your convenience!

That's Lithuania. It's not a relatively small country: it's extremely compact. It's easy to reach, it's pretty much all in one place. It's great work life balance. And that's why Lithuania is feeling kind of Renaissance for re-immigration.

Well, the Lithuanian GDP, if compared to 2000 it has grown five times, if compared to 1995 it has grown 8.6 times. So it was really, really expanding.

Okay, so I knew that if Nigeria was going to grow and the middle class was going to emerge, there has to be a credit culture, right?

And I knew that one person wouldn't be able to do it. One lender wouldn't be able to do it.

Because when you look at Nigeria and look at why credit doesn't work, you need to understand that is a lack of consequences that killed credit. In Nigeria today, if you took money, and you don't pay it back afterwards, nothing happens to you. Now, one of the things that Lendsqr is doing is that, by having a technology driven consequences, then that problem is going to go away.

What we do see is, working with larger providers, a real growth in adoption. If I think about the three months worth of data, live data, that we've got in the bureau - so December into January and Feb - interest free, predominantly online, for a term of no more than three months. There we see 3.8 million unique customers.

A big number, right? And they've made 50 million transactions, spending almost 20 million pounds. And it's not just your Gen Z. It's not just your Millennials, it's across all demographics.

And actually the fastest growing demographic is the 35 to 44 age band. Suddenly, I'm now just outside of that, but it's reflecting the point of becoming more mainstream, right? This is established, right? It's here to stay.

What we're doing is actually really, really complicated, but you can ingest this data and then give it to the bureaus and you know, the keys format, the Insight format, depending on which Bureau it's obviously a very hard thing to build. But imagine if that real time flow of data via an API became something the bureau started to ingest direct from the API.

Step one is to simplify the integration, simplify the reciprocating of data create a common standard, but eventually I think TransUnion, Equifax, and Experian should become real time networks. You know how many customers have a buy now pay later player goes to all the other BNPL players and borrows money in the same month. And if bureau data is stale by a month, two months refreshed once a month, that doesn't get caught in the system, right?

I mean, it's all a matter of perspective. Actually Creditinfo, in relation to the Experian and TransUnion and so on and so forth, is not as large. However, Creditinfo is a very fast growing organisation, and their focus is very much on emerging markets. And that was the piece that was really attractive, you know, the over encompassing idea is Creditinfo's focus is on providing access to finance within the emerging countries.

That was the main driver for me. This call to work with countries, to work in the parts of the world where everything is so dynamic, everything is so fast-moving, you take an action and you see immediately the impact of that one, you roll up your sleeves and you just basically get on with it.

We use the same standard of care across the credit spectrum, and we actively seek new ways to innovate the scoring process. It's the architecture of our model that allows us to score approximately 37 million more individuals than conventional models. And interestingly, to note about that 37 million, approximately 10.7 million are members of the Black and Latino communities who have historically often been underserved. And approximately 3 million of those have scores that are above 620, which is generally considered those that will be eligible for traditional lending products.

So inclusion and broadening access to credit and being predictive have been guiding principles for VantageScore since its inception.

The learning aspect is probably the most important we eat volatility for breakfast, we make love to volatility!

That right there describes our structural - and I think unassailable - advantage in a world that has suddenly become quite a bit more volatile than it has been for the last number of decades, under which my friends in the conventional 1.0 version of the bureau's operate. And global interconnectedness or the globalisation of economies means that things happening in the Ukraine, from which my ancestors hail, to the gas pumps in North America is a pretty direct connection. And so whether it's gas pumps or groceries that are becoming much more expensive, you have consumers feeling it.

And therefore, to my lender customers, those same consumers need to be scored properly in the fullness of all of the environmental macro factors, as well as the micro factors down at the borrower's level.

The mobile wallets information I see, in a way, as a parallel option to Open Banking. It's really where somebody's having their financial transactions give us an indication of their income or their ability to spend, as well as some indication of the consistency of salary over time and the income. So I think what we've seen is combining that with the credit bureau data, you know, really provides a really strong indication of risk.

And we talked about the different data sources, some of the data sources we may not be holding within the the credit bureau, but what we're trying to do is actually facilitate so we can provide decision modules where we're bringing together that data that may be held by the telco or the bank in the mobile wallet and combining that with the credit bureau data so it's easier to use to generate those decisions for the lenders.

So yeah, to kind of summarise our mission: we want to improve the credit health of millions of people by building the world's best credit builder.

And so how do we do that? We want to make sure people are on the proper path to good credit, which is our tagline. And I think when we started talking to customers, and first of all our customer base tend to be quite tech-savvy Millennial or older Gen Z. And when you chat to them, many of their parents have gone through the 2008 financial crisis and credit crunch. And from that very traumatic experience, those parents have educated their kids to say, 'don't trust credit cards' or 'be wary of any form of interest-bearing products'. And it's very endemic in the mentality of that generation. I think it's 50% of this segment of the population don't trust credit cards.

So that's a really interesting insight. And what we wanted to do was then think about, well, people still want mortgages, right? Our customers still have long term financial aspirations, what can we do to design a product that feels fair.

Convenience being such a huge motivator means that we don't need in my view to educate people on what open banking is, we just need to provide the reasons the benefits, especially around convenience, that get people to connect their bank account. And as you said, it is safer sharing that data through a secure channel as a regulated business like like us than, you know, photocopying or printing out your bank statements and then sending them into the post to some unknown place.

And these are all topics that have been talked about for a long time. But it is great to see the use cases start to develop the market start to mature, our understanding of these topics really starts to develop the fact that we don't need to educate consumers on what open banking is we just need to provide them a reason to call to action that makes sense. And if we do that, they get where they need. The business gets what they need. The regulators are happy because there's more richer data to personalise and, and really provide that responsible approach to to those lending situations and, and we just get on with their life. It's exciting.

I've been wheeling and dealing since I was a kid. And I started thinking about the other assets that you could possibly lend against, why aren't people lending against cars or wine or boats or aeroplanes, or pretty much anything? What restricts them? It really sort of started from there, to be honest with you, the bank's inability to function following 2008. They were pulling the rug out from under some really good people's feet, people that are halfway through development sites are having their loans called in, we were hearing stories of doom and gloom. You know, I have friends of mine that were playing golf with a bank manager the day before, but then the bank manager was calling them in the morning saying this is that £25k bank overdraft you've got it's going to have to be repaid.

And I thought, well, this is actually quite a good time to start this business. Because banks aren't lending people can't get their hands on money, but they have had quite a few years of growth. They've all got, we're not all, but I'm from Surrey, there's a lot of Range Rovers, Ferarris, people with expensive pieces of art or wine collections. Wouldn't it be great if they could secure a loan using some of those assets?

And that's really how it all started.

I think you're absolutely right that credit scores in the US are better understood. We're told that Americans ask lenders 'my score is 750, what can you offer me?' and they discussed it openly with friends over dinner - it hasn't quite penetrated the consumer psyche in the same way here, but what's been really positive to see recently, though, is there's definitely a growing awareness of the importance of regularly monitoring your credit information.

And that's been particularly evident through the pandemic TransUnion has been conducting a consumer pulse study to track the impacts of the pandemic on consumer finances, and we found at the end of 2021 that almost half of UK consumers are now monitoring their credit score at least monthly. And that's up from a third at the start of May 2020. Downside is our data has also shown that a quarter of people have never checked it, which is worrying given the important role that this information plays in helping people get access to finance and protecting their identity.

So we had to tweak it and move it to image-based selection. And one thing led to the other and ConfirmU evolved from something which is good for the English language but is not scalable for 207 dialects in India, to an actual gamification, which would be much more engaging for people at the bottom of the pyramid. So what better way, you know, of engaging people in that kind of a segment. And our initial pilot was with Experian the nd Grameen Foundation in India, which is really exciting, because in my vision, Grameen Foundation is financial inclusion.

Now, as you said, ConfirmU started out as prop tech before expanding into financial services. What does the product look like today?

What we take pride in is the fact that we collateralize and localise the game to any market that we go to - credit at the end of the day is a matter of cultures, and we need to embed that within our game. So we will do a pilot and we will build a bespoke model for those lenders based on, you know, our understanding from the lender of the practicalities and the characteristics of that audience. And then we would send the link.

So we've created a first-world infrastructure, but it's been an uphill battle to get lenders to embrace the use of bureau data and credit scores and bureau scores to make mass decisions. In Nigeria, it's a legal requirement that you perform two credit inquiries, but that's not to say that you must make good use of the data you're given, as long as you know, you've met your legal obligations. So there hasn't really been an appreciation of how that data can help you improve your decision making. So that's the journey that I've been trying to help my clients to realise - it's been as an educational upskilling, a sort of training project as much as much as a hands-on rebuild the bureau score project.

I think one of the cultural changes that's required is the willingness to invest money in order to save money, that thinking hasn't really been that prevalent in Nigeria, in the past at least. Curiously, that's the first time I've ever encountered a situation where lenders have questioned, well, why are we paying for a credit inquiry if we ended up rejecting that customer? Why would we want to pay for that? Which kind of misses the point of the protection that screening for risk gives you.

when we are looking at new data sources, we have four acid tests that we run through.

The first is the reliability of the data - so is it from a trustworthy source? Is it compliant? Is it of good quality, all those sorts of factors. The second, as you said, is the predictive nature of the data, is it proving out or identifying the hypotheses in the insights that we expected and is doing something which existing datasets can't? The third one is about its scalability, which doesn't mean it has to be the whole population, but for the actual target audience that we're trying to benefit, does it have enough coverage? And the fourth one is, is it understandable, which I think is increasingly important for us.

And we deliberately set the bar understandable rather than explainable because they're different. My science teacher, much to his frustration, spent hours explaining the basics of physics to me, unfortunately, for me, it wasn't very understandable. But actually, that is a really that's a really important point, because it comes back to this control and transparency. If people do not understand it, then why would I trust it? So for us as organisations with new data and new insights, then we have to be able to help people understand why we're doing it and, and the inferences we're drawing.

… one of the reasons that immigration is so essential to the US economy and to the US labour force is that our domestic population is not replenishing, our birth rate in this country is no longer outpacing the demographic shift as the older generation exits the labour force. And what that means in terms of US population growth is that today, immigration drives over 50% of the US population growth...

There are more people today that move to the US than there are people who turn 18 and enter the financial system… and so not having a dedicated strategy for how to attract and retain the recent immigrant segment is a formula to demographically lose market share over time.

"The risk of giving into temptation is as old as humanity. But there are reasons to think that people today are having to work harder to resist it, particularly when it comes to consumer behaviour. Digital technology has made it easier and faster to buy goods and services in an instant, without the delays of processing that once comprised an inbuilt cooling off period". This might sound like a headline from today's papers, but in fact it was from an article in The Financial Times published seven years ago, almost to the day - at a time when Klarna was around, yes, but only just beginning its global expansion, Affirm was only two years old, and AfterPay only a few months old. Welcome back to How to Lend Money to Strangers, the podcast about consumer lending strategies across the credit lifecycle and around the world.

There's a whole bunch of people out there where the traditional model doesn't work, there simply isn't enough information on these people to make a reasonable credit call...

This is a space where lots of people are working, but very few people can claim results. Because this is also the sort of space where lots of AI propellerheads think they can crack the problem. To some extent, that's true. This is also the classic case where progress is both hindered and aided with experience. It's actually good that some youngster on a beanbag, with long hair, thinks about this stuff completely unhindered by any previous industry knowledge, because that's anyone with too much experience probably thinks too much inside the box. At the same time, with something like credit, you do need to have some other people in there who can say, 'well, yeah, that's cool but you need to take these following five things in'.

That doesn't mean that the thinking needs to be restrained, but someone needs to make it practical in the end. To simply let the same space cadets go mad on this is likely to land you in a heap of problems, if you don't actually understand the lending industry.