ZestCash is a new online lending operation to serve the underbanked launched by a previous executive of Google. Internet loans via ZestCash of up to $500 were being made in Utah beginning Oct. 13. The business said it will use data, Google-style, to minimize risk and maximize benefits for its customers.
An alternative internet lending strategy
The person who started ZestCash was Douglas Merrill. He is a previous Google CIO and Vice President of engineering. TechCrunch reports that ZestCash customers get to choose how much cash they want to borrow (up to $500) and just how long they want to take to pay it back. ZestCash has a website that shows customers how weekly payments are affected by time helping them to better choose the term of their loans. The loans don’t have to be paid all at once meaning smaller installments are made. When a customer’s take out a loan online, a full payment schedule showing when each payment will drawn from their accounts is provided. ZestCash also pledges to be flexible with individual borrowers about late payments.
Financing with Google
ZestCash is entering a huge and growing industry. According to the Center for Responsible Lending, about 12 million people take out payday cash advances each year. The payday advance industry lent about $20 billion this past year. The underbanked in The United States, or those who do not have any kind of relationships with a bank, are accounted for in 18 percent of households, or 60 million people, reports the FDIC. Merrill told Reuters that ZestCash will use “Google-style data” to help customers only take out loans they can afford. He then explains the Google loan underwriting is going to greatly used. This technology will allow numerous people who were never able to get credit before to start seeing it.
Data crunching helps financial loans out
Payday loan businesses determine their fees based on the risk involved with no credit checks. The online lending industry may be transformed by the “Google-like data crushing way” that ZestCash will start using, states Quentin Hardy at Forbes. ”Research in economics, math and computer science” is what ZestCash utilizes to make decisions, Merrill told Hardy. The information is found by ZestCash engineers. These engineers get the info through customer questionnaires, phone calls and details off the Internet. In true Google fashion, Merrill said “we believe all data is useful credit data.”
Articles cited
TechCrunch
techcrunch.com/2010/10/12/former-google-cio-douglas-merrill-wants-to-reform-payday-loans-with-zestcash/
Reuters
reuters.com/article/idUS257141103020101013
Forbes
blogs.forbes.com/quentinhardy/2010/10/12/google-style-money-for-americas-poor/
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