For Juvo financial inclusion begins with the phone

“I was compelled by this,” Juvo founder Steve Polsky began.

Mr. Polsky was referring to the challenges faced by more than two billion people and 200 million businesses in emerging markets who lack access to savings and credit. Those challenges, and his experience working across 25 countries in four years, showed him the solution was in the palms of their hands – their mobile phones.

Steve Polsky

That is the short version of how Juvo came to be. Recently named as one of the World Economic Forum’s most innovative startups, Juvo makes it easier for mobile operators to find their customers. With more than 80 per cent of mobile users being prepaid subscribers, Juvo offers real-time credit, the first step toward mobile financial inclusion.

Most mobile users purchase a SIM card at a mobile or convenience store and leave anonymously. That is a missed opportunity, Mr. Polsky said. By being there at purchase, companies can add that information to a user’s identity stored in the cloud. Their digital activity, including purchases, deposits and bill payments can all be logged and analyzed to later offer micro loans and other products that are likely to find useful.

“Meeting someone at the core utility of a phone is a compelling starting point,” Mr. Polsky said.

“Anna” is the hypothetical user. Sitting on her couch, she would like to use her phone and has money, but her balance is up. Whereas before she would have to walk to the store to top up her phone and add to the collection of SIM cards in her purse, none of which are linked to provide a comprehensive record of her activity.

With Juvo, Anna’s daily mobile behavior is analyzed, and her relationship with the mobile operator quantified so they can offer her deals based on that history. Often it begins with a day or two of free mobile service at no fee or interest charged. Those benefits encourage her to stay active with that provider who learns more about her and can then provide catered offers and loyalty benefits.

“And that’s just the beginning of the relationship,” Mr. Polsky said. “As they pay on time they move up and unlock benefits. With gamification moving up reinforces behaviors.”

Over time users in emerging markets better understand the importance of good financial habits and the opportunities they provide.

“What we’re trying to do is to take people on this journey,” Mr.Polsky added.

Of course Juvo isn’t the only company trying to help people in emerging markets improve their financial lives, and theirs isn’t the only approach, but it has advantages over others, Mr. Polsky insists.

Some efforts tout the use of digital wallets which are more complex and involve more education. In contrast, everyone knows how to use a phone and the ability to collect comprehensive information from the phone is well established. A mobile-based option is a single-sided solution requiring no additional effort from other parties, and it can serve as a precursor for other beneficial activities while slicing the acquisition costs for financial services firms.

“You put something out there and people understand it the first time,” Mr. Polsky said. “It’s immediate and tangible as a progression to do more and more.

“That is a problem we can solve.”