Lending Startups Look at Borrowers’ Phone Usage to Assess Creditworthiness

Did you see the interest rates cited in the article? Even the lowest of them is more in line with what you'd find on a credit card account than with what you expect to see on a non-revolving loan of the sort these lenders are offering. Their terms also cite transaction fees, which are generally ignored in discussions of interest, but shouldn't be; when amortized over the term of the loan to provide a basis for fair comparison, they tend to drive the cost of the funds in question from merely high to utterly astonishing. (Payday lenders pull a similar trick, using fixed fees rather than a more typical interest calculation to hide the fact that their loans are priced absurdly high by comparison with even the worst of credit cards.)

Granted, when you find yourself in need of emergency funds at short notice, being able to obtain them even at an extractive cost is preferable to being unable to access funds at any price. But this looks to me like a case where the typical SV veneration of entrepreneurship, regardless of context, is being used to draw a veil over the same abusive practices which have given more typical payday lenders such a bad name.