The Pursuit of Perfect Control and Ultimate Outreach

The Pursuit of Perfect Control and Ultimate Outreach: Social Fintech Platforms, Microcredit Agents and Surveillance Érica S. Siqueira Eduardo H. Diniz Marlei Pozzebon Fundação Getulio Vargas (São Paulo – Brazil) HEC Montreal (Montreal – Canada)

Microcredit, Credit Agents and Social Fintechs • Microcredit methodology as a solution to • Non-availability of information • Lack of guarantees • Low value of transactions • (Micro) Credit agents • Promote service, authorize credit extension, select and monitor clients, collecting funds from defaulting clients inside the community • Establish and manage “solidarity” groups • (Social) Fintech: Social impact and Business Sustainability • Front-End: Field microcredit agents equipped with tablets, laptops or mobile phones • Back-end: Connecting data from clients to algorithms and sophisticated credit scores

Research question “How do microcredit agents influence the use and consequences of digital platforms for financial inclusion? "

Analytical Framework Element of Framework Used Definition Selected Concepts Digital Platform Form of organization or metaorganization, in which a modular architecture coordinates multiple actors Classification, network effects, multi-sided platform strategy, core -periphery architecture Boundary Resources related to the mediation of cooperation between different groups Human boundary resources A new logic of capitalist accumulation Data extraction and analysis; new forms of contract due to better monitoring techniques; personalization and customization; and continuous experiments. Surveillance Capitalism (Zuboff, 2015)

Research approach • Critical perspective • Microcredit Platform (MP) as an instrumental case (Stake, 2005) • The main data collection sources that enabled this study: documents + 4 personal interviews with CEO and microcredit agents • Critical hermeneutic (Myers, 1995)

Microcredit Platform case Initial Investment: US$ 200 k 2012 2013 Exclusively online Focused on low income public Valuation: US$52. 600 k Valuation: US$ 9. 200 k Valuation: US$ 3. 400 k 2014 Venture Capital: FIP 1 2015 Online + store + agents 2016 Online + Community Agents in the Northeast 2017 Payment means startup aquisition 6

Data Analysis

Implications and contributions of this study • We expand the discussion of boundary resources in the field of digital platforms, which focuses mainly on technological elements • Discussion about Surveillance capitalism is strongly focused on digital technologies – like Io. T, Artificial Intelligence and Big Data. We show human elements, agents, based on their close relationships, collaborate and expand the capacity of offline surveillance for digital platforms • We contribute to microcredit and microfinance institution literature by discussing possible changes that fintechs bring to the financial inclusion arena. We put in perspective the mission of social impact, which would be obtained through microcredit (coping with a business model that depends on scale and constant loan renewals to profit from the invested risk capital)

Thanks! erica. siqueira@fgv. edu. br eduardo. diniz@fgv. br marlei. pozzebon@hec. ca