Scaling Up Micro Lending in California Disruptive Technology

Scaling Up Micro Lending in California Disruptive Technology

Morning Agenda 

Welcome: Lena Robinson

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Paradigm Changes: Stanford Microfinance

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New Players Panel

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Bankers Panel

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Lunch at noon

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Lunch Keynote: Barbara Vohryzek

Disruptive Technology An innovation that creates a new market and value network, and eventually goes on to disrupt an existing market, displacing an earlier technology.

Disruptive Technology The term describes innovations that improve a product or service in ways that the market does not expect.

Legacy organizations can miss the value of a disruptive technology, only to be left behind as the new technology matures and takes hold.

Technologies 

Big data and behavioral algorithms

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Automated data access & assessment

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Cloud-based technology & programming

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Online processes

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Mobile technology

Changing Norms New technology is not just putting traditional lending processes online. New technology is changing lending norms. • What’s offered

• How quickly

• On what criteria

• At what price

• To whom

• How restructured

• How delivered

• By whom

Impact on Microlending 

Sophisticated technology available to smaller companies

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Technology is changing the profitability of microlending

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Bringing new players into the market

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Creating new forces, like crowdfunding

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Raising new expectations among borrowers

Rapid Expansion 

‘New-paradigm loans’ widely available

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Taking hold in the market rapidly

Stanford Micro Finance Group Big Data Meets Micro Finance Online Microlending, Machine Learning and Changing the Market 

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Luis Armona Julia Reichelstein

New Players Panel 

Tom Green, Lending Club

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Brad Lensing, Prosper

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Leslie Payne, Lend Up

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Paul Quintero, Accion East

New Players Questions 

What loan products are you offering?

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What is your market, and how do you reach it?

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What is your application process? What information do you require?

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How do you assess clients?

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What technologies are you using for marketing, document collection, underwriting and servicing?

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How quickly can you fund a deal?

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What is your current volume?

Banker Panel Moderator: Barbara Vohryzek, Governor’s Small Business Advocate 

Fred Mendez Rabobank

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Lena Robinson Federal Reserve Bank of San Francisco

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Herman White San Francisco Fire Credit Union

Afternoon Agenda - Members 

Lending Academy

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Member Panel Devon Johnson, Women’s Economic Ventures Naldo Peliks, Centro Community Partners

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Breakouts

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Group Discussion and Survey

CAMEO MicroLending Academy Goals Increase microlending, capacity, technology adoption and access to capital. Features: 

E-newsletter

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Peer Learning

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Training

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Individual Consulting

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Professional Development

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Technology Support

Women’s Economic Ventures

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Devon Johnson

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Microloan Management System (MMS)

MMS Supports lending here

Outreach

Risk Assessment

Application

Underwriting

Document Collection

Closing

Credit Memo

Servicing & Collections

WEV’s Experience 

Doubled deal capacity

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Quicker, clearer decisions

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Saving time: less upfront admin/touch files less

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Invest time after client gives basic info

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Time spent on more viable prospects

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Could expand with less experienced employee

WEV’s Experience 

Not trying to duplicate our previous process

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Stepping into MMS: Investing time to understand rationale for particulars, especially required docs, loan amount and underwriting

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Giving it a year

Centro Community Partners

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Naldo Peliks

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Business Toolkit Presentation

Quick Dyads and Group Discussion Find someone who is not in your organization. 

What response to these trends should our industry be considering?

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What strategic steps could my organization take?

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Is there a role for CAMEO to support members adapting to new lending environment?

Closing 

Wrap up from Claudia Viek

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Please complete your survey

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MMS detailed Q&A available after closing

Thanks!!