To be the First to Extend Your Hand. A new Method for Loans – A Response to Shivani Siroya

October 22nd, 2020

Within the TED Talk, “A smart new business loan for people with no credit”, by Shivani Siroya, two main ideas which are discussed within the presentation are the fact that 2.5 billion people within the world have no sense of financial identity and no formal public or banking records which stops them from receiving any major loan, as well as the fact that despite having a financially risky background (in terms of having no formal banking records), when given a proper loan, repayment rates were 90%, which is similar to that of a traditional bank. The TED talk discussed the story of how this company created an app that allows people to form their own basic credit score to be allowed to take large loans, and as a result of taking such a risk, it was found that even those who may be seen as risky for loans ended up having high repayment rates. The authenticity of such information is backed-up in the talk by the fact that the speaker created this app, recorded all of their findings from said app, and now is willing to publish their surprising findings. In addition, by having us follow the life of one of the many people they gave loans to, how she keeps in contact with her family and respects lending money, the story becomes extremely persuasive. However, there are some criticisms I have with the TED talk. First, is that the speaker never discussed the extent of their loans. Are they loaning as much as a traditional bank would? What is their interest rate? Without such information, they could perhaps be hiding the fact that they are not giving out full loans compared to a traditional bank. Secondly, have they received their information only from Kenya, or have they surveyed and sent loans out to other countries? The limited pool of people within Kenya may not be enough information to safely send out loans to other countries that have populations of people without bank records. This information can relate to my current life, as I have just turned 21 within the past months and have begun living on my own, this presentation highlights the importance of maintaining a good Credit Score as well as the importance of keeping on top of any repayments and respecting money. If I were to lose these critical things, which I am already lucky to have, I may have no hope of recovering. 

-Aaron Wells