The Family Independence Initiative (FII) has seen the power of data to spark concrete social change. By collecting data that focuses on initiative and progress, we can learn what families are prioritizing to get ahead. We then take those real insights and transform them into resources that leverage what families are already doing.
It is an ongoing, iterative process. Just as Amazon refines and shifts a buyer’s recommendations based on his or her growing purchasing history, FII responds to ever-changing data from families to meet their demand.
Character-based Underwriting Criteria
FII saw that families were unable to access loan capital and had few options other than payday lenders. In response, we worked with families to develop underwriting criteria that broaden the factors considered for a loan and also predict the reliability of payback. Our underwriting criteria incorporate information on “character” and social connections, and payment history traditionally not used by banks (rent, cell phone bills, utilities, etc.). These components of the underwriting process work with the assets families have and reinforce the building of relationships, reputation, and trust that happens in strong communities.
Credit-building Lending Circles
People around the world organize loans between friends or family without a financial institution all the time. These lending circles are known as Susus in Ghana, Paluwagan in the Philippines, Lun-hui in China, and Tandas in Mexico. The mechanism is simple: people form a group with others they trust. Everyone in the group contributes money to the pot at regular intervals, and the pot rotates to each member of the group.
Thanks to a partnership with Mission Asset Fund, FII has made credit-building lending circles available to families with whom we partner. The contributions to the pot and payments out are managed with electronic transactions, which are tracked and reported to the credit agencies and help improve participants’ credit score.
FII partner families in different cities wanted a way to connect with and learn from each other. In response, FII built UpTogether, a community-building website using social networking technology. Through UpTogether, people can identify and track progress against their priorities. They can also form groups around common interests to share information, get support, and hold each other accountable.