How your social media reputation could secure you a loan at Bank

Traditional banking in Africa has failed - 80% of the continent's 1.2 billion people do not have a bank account or access to formal financial services.

So mobiles and web-based services are stepping in to fill the gap. But there is much more to Africa's financial services story than M-Pesa, the wildly successful mobile banking platform launched in Kenya and Tanzania in 2007.

For example, Nigeria's Social Lender looks at borrowers' social media profiles to assess their creditworthiness.

One of the issues lenders face is that it is near impossible to obtain adequate data about people, particularly in rural areas. So mobile and web are proving useful ways of gathering it.

Social Lender uses its own algorithm to assign a "social reputation score" to each user, with "social guarantors" acting like referees validating their trustworthiness.

As the youth-orientated website strapline has it: "Get rep, get cash, stay fly".

"The solution is designed to bridge the gap of immediate fund access for people with limited access to formal credit," says co-founder Faith Adesemowo.

"Loans are guaranteed by the user's social profile and network, allowing users to borrow from banks and other financial institutions based on their social reputation," she says.

Social Lender currently has more than 10,000 registered users taking out loans of up to 10,000 Naira (£24) with a default rate of less than 4%.

Users can withdraw cash loans via bank accounts or mobile money.

"We solve the problems of prohibitive cost to serve the market, inadequate financial history, unreliable credit score and lack of collateral for these people that hitherto prevented our partner financial institutions from serving this market," says Ms Adesemowo.

Data intelligence

Mobile phone data is also helping to give lenders and other financial service providers useful information about potential customers.

Based in Cape Town, Jumo partners with mobile operators in countries like Kenya, Tanzania and Zambia, to gain access to data on how people use their phones.

Its algorithms analyse a person's smartphone usage - how much they spend on airtime, how they use their mobile money wallet - to come up with a "Jumo score", which rates their creditworthiness.