ImpactAlpha, November 13 – San Francisco-based PayJoy is expanding access to financial services by helping unbanked customers buy a smartphone.
PayJoy offers unbanked adults upfront smartphone financing, using its own credit underwriting tool. Its technology has the ability to lock any phone whose payments are delinquent. After customers pay off their phone, they become eligible for a $100 loan, collateralized by the device. PayJoy’s combined financing and follow-on lending helps customers build their credit score and get approved for other financial products, like credit cards.
“PayJoy therein establishes a process to create financial identities and entrance to the formal financial sector for the base of the pyramid worldwide,” the company said in a statement.
Arc Labs, an early-stage credit fund, has issued $20 million in debt financing to PayJoy to expand its smartphone financing and customer lending. The startup will use the new funding to expand in Mexico, where it currently partners with 1,600 merchants.
