By Olivia Whenman
Hands up if you’d be willing to sacrifice your own credit score for a Facebook friend.
Money-lending company Lenddo wants you to do just that, and all in the name of serving the “underbanked”.
But how many of you can confidently say they are comfortable being collateral for a friend’s bank loan? Guesses are Lenddo is more than aware of the modern peer pressures that social media is creating and are hoping that you are too.
A recent study by anthropological psychologist Robin Dunbar has shown 150 to be the maximum number of “real” friends any one person can have. Yet social networking sites increase our social sphere way beyond this so-called “Dunbar Number”.
In fact, another study has highlighted a Facebook user’s friend count is generally less than that of their friends, creating what is known as the “friendship paradox”.
So what, we can only have 150 real friends but then somehow everyone else seems to have more? This is where the premise behind Lenddo comes into play.
No matter what, some individuals are going to have an advantage over others in terms of their access to resources.
For example, as you’re scrolling down your Facebook feed you may be graced with status updates such as “Scored at job at [insert really cool place here]!” and thus you’ll begin to quietly sob to yourself whilst wondering, “how the hell did they manage that?”
Chances are they used their social network to make some trendy connections.
Therefore, companies such as Lenddo have leapt at the chance to use this unique phenomenon, because after all don’t we all just want to be loved…and look really cool at the same time?
Lenddo uses social data from a range of social media sites such as Facebook, LinkedIn, Twitter, and Yahoo! to obtain your “LenddoScore” of which takes into account your strongest interactions. In many cases this means your family, bestfriends, and close coworkers…however, if you or your Trusted Connections miss payments your community will be adversely affected.”
This all operates on what Lenddo boss Jeff Stewart likes to call a “social-enforcement mechanism” because once you know your friends credit scores could be affected by your unreliable behaviour “boom, the money shows up.”
WOW great, so on top of the peer pressure to look good, do well at university, and see the latest episode of ‘Homeland’, I now also have to make sure my friends don’t think I’m a dick because I can’t repay my loan?
I for one can say that the fear of being abandoned by “real” friends is probably high on the agenda of “things I don’t want to happen to me”.
It goes without saying that Lenddo has basically tapped in to one of the most valuable products of all – our social status. They know and understand that the technologically savvy, social media using generation value their social connections highly.
No one wants to see that one-digit drop in Facebook friends or Twitter followers. “Why don’t they like me?” you might sigh. Could it be the fact that you simply just couldn’t make a Lenddo loan repayment for the second time this year and now your friend is fuming at you because their credit score has plummeted?
It doesn’t matter if they’re your BFF or that guy you talked to once at that party your cousin’s friend invited you to four years ago. A study conducted by Christopher Sibona, a doctoral student at University of Colorado Business School, found up to 40% of unfriended party’s would avoid the person that unfriended them on Facebook if they saw them in real life.
One major reason for unfriending someone was “frequent, unimportant posts”, so it could be that you’re constant mundane life updates drove them to insanity and they needed to escape otherwise they’d become a homicidal maniac at the mere mention of the weather.
Contrariwise to that, Movenbank a financial service company is hoping to channel your online social presence to calculate what they have dubbed “CREDscore®.” This means your “frequent, unimportant posts” will become frequent, significant posts that if employed correctly will refer your Facebook friends, etc. to Movenbank. The more people you refer to the financial service the better your “CREDscore®” gets.
However, last time I checked not many people needing monetary loans were on Times “Most Influential People in the World” list.
So where’s the equality in these so-called money-lending services? How are they bringing creditworthiness to the middle class or helping Gen Y utilise the technologies so prevalent in their everyday lives?
Social media is still in its infancy so we probably won’t know the impacts of online loan services such as that of Lenddo and Movenbank for a while yet.
Therefore, in the mean time remember there are 150 people out there who are truly your friends. Surely one is willing to meet with outside of the social mediascape. If not, well guess who’s not going to be used as collateral anymore huh?