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Juvo reckons it has solved the prepaid credit crunch

Juvo 2

Much of the world is skint, but they still want to use mobile phones. This is the dilemma mobile finance startup Juvo has been created to address.

It all comes down to microcredit – extending very small loans to people who, at first glance, are pretty far from low-risk. In an era defined in the developed world by the absurd practice of credit scoring agencies offering to improve your supposedly absolute and objective score for a fee, many people don’t even have one to manipulate, let alone the cash to do so even if they did.

The mobile industry is increasingly looking to developing markets for growth in both handset sales and service revenue but, of course, per capita disposable income is much lower in such places. While us pampered, bourgeois westerners may not think twice about dropping well over a grand on a two-year iPhone contract, in much of the world the average phone purchase is well under £100 and service is on a strictly PAYG basis.

The thing about the prepaid model, however, is that you have to pre-pay. There is no real opportunity to say to your CSP “can you just sort me out with a few minutes for today and I’ll sort you out tomorrow.” Until now, that is.

In an interview with Telecoms.com, we asked Juvo CEO Steve Polsky what the point of his company is. For consumers, we open up access to otherwise unattainable mobile financial services through immediate credit extensions for telecom date, such a voice and data. The result is a 10-15% boost in ARPU and significantly reduced churn. Our overarching vision is a big one: financial inclusion for all.”

That’s a lovely vision, but surely there are good reasons everyone isn’t already financially included, such as being a massive credit risk. “We don’t think so, and the data from our deployments suggest there’s no significant risk,” said Polsky. “Juvo’s proprietary data science technologies and methodologies determine individual lending criteria and credit worthiness which enables us to make real-time decisions with optimal payback rates. Game mechanics incentivize users to pay loans back so they can continue up the path for greater reward and financial opportunity.”

In other words it’s only by spotting people a bit of cash that you conclusively find out if they’ll pay it back. While some people will inevitably take liberties most, it is assumed, will play nice because they don’t want the credit tap turned off.

But apart from the warm feeling from helping a skint person call their mates, what’s in it for operators? “In a word: differentiation,” said Polsky. “It’s becoming harder and harder for operators to attract and retain subscribers – especially in emerging markets. Broadly speaking, telecoms services don’t tend to be highly differentiated, so there are very low levels of loyalty – especially in pre-paid.

“Financial services – from very basic credit extensions to use voice and data services, through to personal loans and insurance – represent a huge opportunity to differentiate operator services, drive loyalty and generate new revenues. For example, we’re seeing churn amongst Juvo users tumble by about half what operators would normally expect.”

Juvo has been 2.5 years in the making and feels it’s in the right place at the right time. It’s already claiming a market footprint (whatever that means) of 23 countries and 100 million subscribers and, if it does take off, could be very big indeed. That all depends on how keen operators are to solicit business they had previously overlooked.


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