ZestCash begun by ex-Google VP to lend little loans online

ZestCash is a new online lending operation to serve the underbanked launched by a previous executive of Google. Internet loans through ZestCash of up to $500 were being made in Utah beginning Oct. 13. ZestCash’s founder said the business draws its inspiration from Google in the way it crunches data to achieve the best financing solutions for its customers. Source of article – Ex-Google exec founds ZestCash, online lender to the underbanked by Personal Money Store.

Online financing differently done

ZestCash had been founded by previous Google CIO and Vice President of engineering Douglas Merrill. ZestCash customers, based on TechCrunch, get to choose how much cash, up to $500, they want to borrow and just how long to repay it’s going to take. The term of a loan is chosen by the customer with just a little help from the ZestCash site. It shows how a weekly payment is affected by time on the site. Small installments are used to pay back the financial loans. This mean there does not have to be one large repayment. 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.

Google financing now

The industry ZestCash is going into is pretty large and growing. The Center for Responsible Financing explains that financial loans are typically taken out by lots of individuals. In fact, 12 million people take out loans every year. This past year $20 billion in financial loans had been made. This was just in the payday loan industry too. According to the FDIC, about 18 percent of U.S. households — 60 million individuals, are underbanked, meaning they don’t have established relationships that enables them to borrow from a financial institution. 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 allows many individuals who were never able to get credit before to start seeing it.

Lending options doing far better due to data crunching

Payday loan companies determine their fees based on the risk involved with no credit checks. The online lending industry might be transformed by the “Google-like data crunching way” that ZestCash will start using, states Quentin Hardy at Forbes. Hardy spoke with Merrill about this. Merrill said that ZestCash uses “research in economics, math and computer science” in order for making decisions. The data is found by ZestCash engineers. These engineers get the info through consumer questionnaires, phone calls and details off the Internet. Merrill explains that true Google fashion means, “we believe all data is useful credit data.”

Citations

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/