Sunday Labs – App Development, Fintech Development, Banking, Insurance, Blockhain and web3, Game Development, Poker, Rummy, Fantasy games, LMS

Revolutionizing Credit Scoring in Tier 3 Cities and Villages: The Social Media Solution

Picture of Aditya Vandhye

Aditya Vandhye

3 min read

In a rapidly changing financial landscape, traditional credit scoring methods can be limiting when it comes to serving underserved communities in tier 3 cities and villages. Enter the innovative approach of leveraging social media data to evaluate the creditworthiness of individuals with little to no financial digital footprint. This blog explores the journey of one of the biggest banks in Indonesia, where they tapped into the world of Instagram and TikTok to bridge the credit gap.

Challenges: A Blank Digital Slate

In the vast landscapes of tier 3 cities and villages, individuals often lack a substantial financial digital footprint. This scarcity of traditional data makes it challenging for banks to assess the creditworthiness of potential customers. Without a credit history or any substantial records, how can financial institutions make informed lending decisions?

Opportunities: The Rise of Social Media

While these individuals might have minimal financial data, they are far from being digitally inactive. Many of them are highly active on social media platforms like Instagram and TikTok. This digital activity opened up a new world of possibilities for assessing creditworthiness.

The Solution: Leveraging Social Media Data

The Bank decided to explore this untapped resource by requesting access to the Instagram and TikTok accounts of potential customers through API-based access. This initiative marked a significant shift in the way credit scoring is traditionally done. Instead of relying solely on financial history, the bank began to analyze users’ interactions on these platforms.

Mapping Users: Low, Medium, High Categories

The bank developed a robust algorithm that evaluated users based on several factors:

  1. Interaction with Users with Valid Credit Scores: Users who engaged with individuals known to have good credit histories were assigned higher scores.
  2. Engagement on Social Media Platforms: The frequency and level of engagement on Instagram and TikTok were analyzed to gauge the users’ level of social activity and connectedness.
  3. Content Consumption: The type of content consumed also played a significant role. Users engaging with content related to financial literacy and responsible financial behaviour were considered positively.

Accuracy Achieved: 70%

Through this innovative approach, The Bank was able to accurately categorize potential customers into low, medium, and high-risk groups with a remarkable 70% accuracy rate. This was a groundbreaking achievement, given the lack of traditional credit data.

Dynamic Credit Scoring

What sets this approach apart is its adaptability. The Bank didn’t stop at the initial categorization. Instead, they continued to monitor users’ social media activities, allowing them to adjust ratings and categories accordingly. This dynamic approach ensured that customers’ evolving financial behaviours were reflected in their credit scores.

Pseudo Code for Social Media-Based Credit Scoring

Let’s break down the pseudo-code for the social media-based credit scoring system:# Import necessary libraries
import requests
import social_media_analyzer

# Define user’s social media accounts
instagram_username = “user123”
tiktok_username = “user456”

# Get API-based access to social media data
instagram_data = requests.get(f”{instagram_username}”)
tiktok_data = requests.get(f”{tiktok_username}”)

# Analyze social media data
social_media_score = social_media_analyzer.analyze(instagram_data, tiktok_data)

# Evaluate user’s creditworthiness
if social_media_score > 0.7:
credit_category = “High”
elif social_media_score > 0.4:
credit_category = “Medium”
credit_category = “Low”

# Update user’s credit rating and category in the database
database.update_credit_rating(user_id, credit_category)

# Continuously monitor and adjust credit scores over time
while True:
new_social_media_data = requests.get_updated_data(instagram_data, tiktok_data)
updated_social_media_score = social_media_analyzer.analyze(new_social_media_data)
if updated_social_media_score != social_media_score:
database.update_credit_rating(user_id, updated_social_media_score)
social_media_score = updated_social_media_score

This pseudocode outlines a simplified version of the process. In practice, the algorithm would be more complex and involve extensive data analysis.

Conclusion: A Bright Future for Inclusive Banking

This Bank’s pioneering approach to credit scoring has demonstrated that the world of social media can be a powerful ally in extending financial services to underserved communities. As technology continues to advance, financial institutions worldwide may look to leverage alternative data sources, like social media, to create more inclusive and accurate credit scoring models. This innovative approach has the potential to reshape the landscape of banking, making financial services accessible to a broader range of individuals, regardless of their traditional credit history.



Don't forget to share this post!

Related Articles

Wake up to the realities of starting up!

A seasoned entrepreneur’s insight prompts reflection on startups straying from market realities. In this blog, we explore the practical aspects of addressing demand-supply gaps, the imperative of engaging with the real world, and a nuanced understanding of funding for scaling innovations.

Building with Purpose

One can easily get swayed by the delusion in the fancies of funding, raising capital, and focusing solely on valuation rather than value creation. In general, businesses tend to fail with that approach.

Successful entrepreneurship hinges on purposeful solutions that fill genuine demand-supply gaps. Thriving startups authentically respond to real-world problems, ensuring their offerings align with market needs.

Engaging with Reality

“Stepping into the real world” is our immediate call to action, urging entrepreneurs to immerse themselves in tangible audience needs. Comprehensive market research and direct user engagement foster solutions that organically resonate.

Survival vs. Scaling

Funding should ideally be a strategic resource for growth, not a survival prerequisite. A robust business model, independent of constant funding, reflects a startup’s resilience and genuine demand.

The Exception

We do understand that while most businesses can shift focus on value creation and thrive, some exceptional technologies may require resources to kick-start.

Groundbreaking technologies, like ChatGPT, may require substantial resources. While not universal, this exception highlights the importance of discerning the startup’s nature and funding needs.


In the dynamic startup landscape, relevance and impact demand a pragmatic approach. By addressing real demand-supply gaps, engaging with the real world, and nuanced funding, entrepreneurs can navigate with purpose. Building businesses that matter is about leaving a meaningful imprint by providing solutions deeply rooted in authentic needs.

Featured Post

Why Hiring an Extended Team Can Catapult Your Growth?

In the fast-paced world of tech, the revolving door of developer talent has become a prevalent challenge for companies aiming to build robust in-house teams. With the median time developers spend at a company just over one year, it’s time to rethink traditional hiring strategies. In this blog, we explore the drawbacks of sticking to the status quo and advocate for a game-changing approach: hiring an extended team to leapfrog competition, accelerate product development, and minimize opportunity costs.

Embracing Change:

The traditional model of investing time and resources in building an in-house tech team, only to witness high turnover rates, is a costly affair. Instead of running marathons while still figuring out how to walk, businesses should consider a more agile and strategic approach. By embracing change and hiring an extended team, companies can navigate the challenges of talent retention and maximize their potential for success.

Opportunity Costs Unveiled:

Building an in-house team demands time, effort, and significant financial investment. However, the risk of losing millions in opportunity costs becomes apparent when developers, on average, switch jobs every year. Waiting for the perfect cultural fit can further delay progress and hinder growth. It’s time to prioritize results over cultural nuances and opt for a more pragmatic hiring approach.

The Extended Team Advantage:

Hiring an extended team offers a solution to the pitfalls of the one-year turnover trend. This model allows companies to tap into a global pool of skilled professionals without the need for a lengthy recruitment process. By collaborating with seasoned experts who have already demonstrated their commitment and expertise, businesses can fast-track product development, scale efficiently, and, most importantly, reduce the risk of losing valuable time and resources.

Leapfrogging the Competition:

In a landscape where speed is often the key to success, the extended team approach becomes a game-changer. Rather than investing months in assembling an in-house team, companies can leapfrog the competition by swiftly onboarding an extended team. This agile approach enables businesses to focus on what matters most — building and scaling their product — without succumbing to the pitfalls of prolonged hiring processes.


In a world where change is the only constant, businesses must adapt their strategies to stay ahead. The one-year turnover trend among developers is a clear signal that the traditional in-house hiring model is no longer the most effective option. By embracing the extended team approach, companies can minimize opportunity costs, accelerate growth, and leapfrog the competition. It’s time to shift the paradigm and build a tech team that propels your business forward. Don’t run marathons when you can leapfrog to success!

PS. We can help. Let’s talk. Link to my calendar —

Featured Post

What is the right time to raise funds?

The startup ecosystem is abuzz with innovation, energy, and a constant quest for funding. While passion and dedication are essential ingredients for success, financial resources play a crucial role in propelling a startup from its nascent stages to exponential growth. However, timing your fundraising efforts is critical to maximizing your chances of securing the right investment and achieving your entrepreneurial dreams.

The Counterintuitive Art of Raising Funds from a Position of Strength

The conventional wisdom surrounding fundraising often suggests that seeking capital is urgent, especially when the startup is in its initial phases. However, this approach may not always yield the best results. Raising funds when your startup is demonstrating traction and displaying a proven business model can be far more advantageous.

This counterintuitive strategy stems from the simple fact that investors are more likely to be attracted to a startup that has already established its viability and potential for growth. When your startup has a clear runway, a solid track record of generating revenue, and a unique value proposition, you are in a better position to negotiate favourable terms with potential investors.

Traction: The Investor’s Magnet

Traction, a measure of a startup’s growth and momentum, is a key factor investors consider when evaluating funding opportunities. They seek evidence that your startup is gaining traction in its target market, demonstrating user engagement, and making strides towards achieving its business objectives.

While the exact level of traction required to attract investors varies depending on the industry and stage of the startup, consistently demonstrating month-over-month growth is a strong indicator of success. This upward trajectory signals to investors that your startup has the potential to scale and generate significant returns.

Relationships: The Cornerstone of Fundraising Success

Building relationships with potential investors is an ongoing process that should not be relegated to the fundraising stage alone. Networking with industry experts, attending investor conferences, and actively engaging with the startup community can open doors to valuable connections.

Establishing a rapport with investors early on provides an opportunity to showcase your startup’s vision, team, and potential. It also allows investors to get a firsthand understanding of your leadership, expertise, and ability to execute your business plan. These connections can prove invaluable when the time comes to seek funding formally.

The Right Time is Now: Seizing the Moment

The ideal time to raise funds for your startup is when you have a combination of factors working in your favour:

  • Adequate Runway: A healthy runway, the amount of time a startup can operate without additional funding, provides stability and allows for strategic decision-making.
  • Demonstrated Traction: Consistent growth and user engagement validate your startup’s potential and attract investor interest.
  • Strong Relationships: Cultivated connections with potential investors foster trust and understanding, increasing the likelihood of favourable terms.

When these elements converge, your startup is well-positioned to secure the right funding at the right time. Remember, raising funds is not just about securing financial resources; it’s about partnering with investors who believe in your vision and can provide valuable guidance and support as your startup embarks on its journey to success.

But, end of the day you should never prioritise fundraising more than building your product and business. Build a business that becomes a magnet for investors. Then you can raise money on your terms!

Are you raising money or looking at how can you leverage tech to do so?

Let’s talk? —

Featured Post
Load More