Harvard Case - Esusu: The Missing Link in Credit Reports
"Esusu: The Missing Link in Credit Reports" Harvard business case study is written by Russell Siegelman, Gelila Bekele. It deals with the challenges in the field of Strategy. The case study is 15 page(s) long and it was first published on : Nov 23, 2021
At Fern Fort University, we recommend Esusu leverage its existing network and data to develop a comprehensive credit scoring system that integrates with traditional credit bureaus, thereby unlocking access to formal financial services for underserved communities. This strategy will involve a multi-pronged approach encompassing:
- Building a robust credit scoring model: Utilizing Esusu's unique data on consistent repayment history within the Esusu community.
- Partnering with traditional credit bureaus: Integrating Esusu's credit scoring system with existing credit reporting frameworks.
- Developing financial products tailored to Esusu members: Offering microloans, savings accounts, and other financial services based on the new credit scores.
- Expanding into new markets: Leveraging the success in the US to replicate the model in other emerging markets facing similar credit access challenges.
2. Background
This case study explores the innovative concept of Esusu, a rotating savings and credit association (ROSCA) operating in the United States. Esusu addresses the financial needs of underserved communities, particularly immigrants and minorities, who often lack access to traditional credit products due to limited credit history. By leveraging the trust and social capital within these communities, Esusu facilitates savings and provides a platform for peer-to-peer lending. However, the lack of integration with traditional credit reporting systems limits Esusu members' access to formal financial services beyond the Esusu network.
The main protagonists are:
- Abimbola Adesanya and Tope Awotona: The founders of Esusu, who recognized the need for a financial solution tailored to underserved communities.
- Esusu members: Individuals who participate in the Esusu system, benefiting from the collective savings and lending opportunities.
- Traditional credit bureaus: Organizations like Experian, Equifax, and TransUnion, which maintain credit histories and scores for individuals.
3. Analysis of the Case Study
Competitive Advantage: Esusu possesses a significant competitive advantage in the financial services market by focusing on underserved communities. Its unique model leverages social capital and trust within these communities, providing a safe and accessible platform for savings and lending. This approach addresses the specific needs of individuals often excluded from traditional financial services.
SWOT Analysis:
Strengths:
- Strong community network: Esusu has built a strong network of members within underserved communities, fostering trust and engagement.
- Unique data on repayment history: Esusu possesses valuable data on consistent repayment behavior within its community, providing a strong foundation for credit scoring.
- Focus on financial inclusion: Esusu's mission aligns with the growing need for financial inclusion, addressing the needs of individuals often excluded from traditional financial services.
- Innovative business model: Esusu's ROSCA model offers a unique and effective solution for savings and lending within underserved communities.
Weaknesses:
- Limited access to formal financial services: Esusu members currently lack access to formal credit products due to the absence of integration with traditional credit bureaus.
- Potential for financial risk: While Esusu leverages social capital and trust, there is a risk of default or fraud within the system.
- Limited scalability: The current model relies heavily on community engagement and trust, potentially limiting its scalability to larger markets.
Opportunities:
- Partnering with traditional credit bureaus: Integrating Esusu's credit scoring system with existing credit reporting frameworks can unlock access to formal financial services for members.
- Developing financial products tailored to Esusu members: Offering microloans, savings accounts, and other financial services based on Esusu's credit scoring system.
- Expanding into new markets: Replicating the Esusu model in other emerging markets facing similar credit access challenges.
- Leveraging technology: Utilizing technology and analytics to enhance efficiency, transparency, and scalability of the platform.
Threats:
- Competition from existing financial institutions: Traditional financial institutions may enter the market, potentially posing a threat to Esusu's market share.
- Regulatory changes: Changes in regulations related to financial services could impact Esusu's operations and growth.
- Economic instability: Economic downturns could impact Esusu members' ability to repay loans, affecting the platform's financial stability.
Porter's Five Forces:
- Threat of New Entrants: Moderate - The ROSCA model is relatively simple to replicate, but establishing trust and a strong community network within underserved communities might be challenging for new entrants.
- Bargaining Power of Buyers: Low - Esusu members have limited bargaining power due to their limited access to alternative financial services.
- Bargaining Power of Suppliers: Low - Esusu relies on technology and data infrastructure, which are readily available from various suppliers.
- Threat of Substitute Products: Moderate - Traditional financial institutions offer alternative financial products, but Esusu's focus on community and trust provides a unique value proposition.
- Rivalry Among Existing Competitors: Moderate - Esusu faces competition from other community-based financial institutions and fintech companies offering similar services.
Value Chain:
- Inbound Logistics: Esusu relies on technology infrastructure and data management systems to facilitate transactions and track member activity.
- Operations: The core operations involve managing the Esusu network, facilitating savings and lending, and ensuring timely repayments.
- Outbound Logistics: Esusu provides access to financial services and facilitates the disbursement of loans to members.
- Marketing & Sales: Esusu relies on community outreach and word-of-mouth marketing to attract new members.
- Service: Esusu provides ongoing support and guidance to members, addressing their financial needs and fostering community engagement.
Business Model Innovation:
Esusu's business model innovates by leveraging the social capital and trust within underserved communities to address the credit access gap. This approach goes beyond traditional credit scoring models by incorporating social factors and community engagement, providing a more inclusive and relevant assessment of creditworthiness.
Corporate Governance:
Esusu's corporate governance should prioritize transparency, accountability, and ethical practices to maintain trust within the community. This includes establishing clear rules and procedures for managing funds, ensuring fair and equitable treatment of members, and protecting member data.
4. Recommendations
Building a Robust Credit Scoring Model:
- Data Collection and Analysis: Esusu should systematically collect and analyze data on member repayment history, including frequency, amount, and duration of payments. This data should be standardized and anonymized to comply with privacy regulations.
- Developing a Scoring Algorithm: Esusu should develop a credit scoring algorithm that incorporates its unique data on consistent repayment behavior within the Esusu community. This algorithm should be validated and tested to ensure its accuracy and reliability.
- Integrating Social Factors: The scoring model should consider social factors such as community engagement, trust within the network, and participation in other Esusu programs. This approach recognizes the importance of social capital in assessing creditworthiness.
Partnering with Traditional Credit Bureaus:
- Strategic Partnerships: Esusu should seek strategic partnerships with traditional credit bureaus like Experian, Equifax, and TransUnion. These partnerships should enable Esusu to integrate its credit scoring system with existing credit reporting frameworks.
- Data Sharing Agreements: Esusu should negotiate data sharing agreements with credit bureaus, ensuring the secure and ethical transfer of member credit data.
- Joint Marketing Initiatives: Esusu and credit bureaus should collaborate on joint marketing initiatives to raise awareness about the new credit scoring system and its benefits for underserved communities.
Developing Financial Products Tailored to Esusu Members:
- Microloans: Esusu should offer microloans to members based on their new credit scores, providing access to affordable and flexible financing for various needs.
- Savings Accounts: Esusu should develop savings accounts with competitive interest rates, encouraging members to build their financial security.
- Other Financial Services: Esusu can explore offering other financial services like insurance, investment products, and financial education programs tailored to the needs of its members.
Expanding into New Markets:
- Market Research: Esusu should conduct thorough market research to identify other emerging markets facing similar credit access challenges. This research should consider factors like demographics, economic conditions, and regulatory landscape.
- Partnering with Local Organizations: Esusu should collaborate with local organizations, community leaders, and financial institutions in target markets to establish a strong foundation for expansion.
- Adapting the Model: Esusu should adapt its model to the specific needs and cultural context of each new market, ensuring its relevance and effectiveness.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: Esusu's core competency lies in leveraging social capital and trust within underserved communities. The recommendations align with this competency by building a credit scoring system based on Esusu's unique data and community engagement.
- External customers and internal clients: The recommendations prioritize the needs of Esusu members by providing them with access to formal financial services and improving their creditworthiness.
- Competitors: The recommendations aim to differentiate Esusu from competitors by offering a more inclusive and relevant credit scoring system tailored to the specific needs of underserved communities.
- Attractiveness ' quantitative measures if applicable: The recommendations are expected to increase Esusu's revenue, profitability, and market share by expanding its customer base and offering new financial products.
- Assumptions: The recommendations assume that Esusu can successfully develop a robust credit scoring model, secure partnerships with credit bureaus, and adapt its model to new markets.
6. Conclusion
Esusu has the potential to revolutionize credit access for underserved communities by leveraging its existing network and data to develop a comprehensive credit scoring system. By integrating with traditional credit bureaus and offering tailored financial products, Esusu can unlock access to formal financial services, empowering individuals and fostering economic growth within these communities.
7. Discussion
Other Alternatives:
- Focusing solely on internal lending: Esusu could continue operating as a ROSCA without integrating with traditional credit bureaus. However, this approach would limit members' access to formal financial services and potentially hinder Esusu's growth.
- Partnering with microfinance institutions: Esusu could partner with microfinance institutions to offer loans to members. However, this approach might require Esusu to relinquish some control over its operations and potentially compromise its mission of financial inclusion.
Risks and Key Assumptions:
- Data privacy and security: Esusu must ensure the secure and ethical handling of member data, complying with relevant privacy regulations.
- Accuracy and reliability of the credit scoring model: The success of the recommendations hinges on the accuracy and reliability of the credit scoring model.
- Acceptance and adoption by credit bureaus: Esusu needs to secure partnerships with credit bureaus and ensure the acceptance and adoption of its credit scoring system.
- Market response and competition: The success of Esusu's expansion into new markets depends on the market response and competition from existing financial institutions.
8. Next Steps
- Develop a detailed implementation plan: This plan should outline the specific steps, timelines, and resources required to implement the recommendations.
- Secure funding: Esusu should secure funding to support the development of its credit scoring system, partnerships with credit bureaus, and expansion into new markets.
- Build a strong team: Esusu should assemble a team of experts in credit scoring, data analytics, financial services, and market expansion.
- Pilot the credit scoring system: Esusu should pilot its credit scoring system with a select group of members to test its effectiveness and identify any necessary adjustments.
- Monitor and evaluate progress: Esusu should regularly monitor and evaluate the progress of its implementation plan, adjusting its strategy as needed to ensure its success.
By taking these steps, Esusu can leverage its unique position to unlock access to formal financial services for underserved communities, fostering economic growth and creating a more equitable financial system.
Hire an expert to write custom solution for HBR Strategy case study - Esusu: The Missing Link in Credit Reports
more similar case solutions ...
Case Description
Abbey Wemimo and Samir Goel founded Esusu in 2018 to help low-to-moderate-income renters build credit history. Esusu, a for-profit impact focused venture, collected rental payments from property managers and reported this data to major credit bureaus, which helped renters improve their credit scores. In April 2020, only six months after closing their first institutional round of capital, New York state issued a lockdown to prevent the spread of the COVID-19 pandemic. During this period, the Esusu leadership team addressed numerous priorities-transitioning their team to operate online, managing employee health concerns, calling clients and investors while still running the company's day-to-day operations. Ultimately, Wemimo and Goel must decide whether to cut costs in order to keep Esusu's existing business afloat or build new products and leverage new partnerships to serve renters and property managers during a time of crisis. In this case, students are encouraged to examine the history and evolution of the credit-scoring models used in the U.S. The case also explores the impact that a lack of credit records may have on American families in particular among minority groups. The case chronicles how Esusu sought to tackle these challenges in a time of crisis, as well as the strategic decisions they faced along the way.
🎓 Struggling with term papers, essays, or Harvard case studies? Look no further! Fern Fort University offers top-quality, custom-written solutions tailored to your needs. Boost your grades and save time with expertly crafted content. Order now and experience academic excellence! 🌟📚 #MBA #HarvardCaseStudies #CustomEssays #AcademicSuccess #StudySmart Write my custom case study solution for Harvard HBR case - Esusu: The Missing Link in Credit Reports
Hire an expert to write custom solution for HBR Strategy case study - Esusu: The Missing Link in Credit Reports
Esusu: The Missing Link in Credit Reports FAQ
What are the qualifications of the writers handling the "Esusu: The Missing Link in Credit Reports" case study?
Our writers hold advanced degrees in their respective fields, including MBAs and PhDs from top universities. They have extensive experience in writing and analyzing complex case studies such as " Esusu: The Missing Link in Credit Reports ", ensuring high-quality, academically rigorous solutions.
How do you ensure confidentiality and security in handling client information?
We prioritize confidentiality by using secure data encryption, access controls, and strict privacy policies. Apart from an email, we don't collect any information from the client. So there is almost zero risk of breach at our end. Our financial transactions are done by Paypal on their website so all your information is very secure.
What is Fern Fort Univeristy's process for quality control and proofreading in case study solutions?
The Esusu: The Missing Link in Credit Reports case study solution undergoes a rigorous quality control process, including multiple rounds of proofreading and editing by experts. We ensure that the content is accurate, well-structured, and free from errors before delivery.
Where can I find free case studies solution for Harvard HBR Strategy Case Studies?
At Fern Fort University provides free case studies solutions for a variety of Harvard HBR case studies. The free solutions are written to build "Wikipedia of case studies on internet". Custom solution services are written based on specific requirements. If free solution helps you with your task then feel free to donate a cup of coffee.
I’m looking for Harvard Business Case Studies Solution for Esusu: The Missing Link in Credit Reports. Where can I get it?
You can find the case study solution of the HBR case study "Esusu: The Missing Link in Credit Reports" at Fern Fort University.
Can I Buy Case Study Solution for Esusu: The Missing Link in Credit Reports & Seek Case Study Help at Fern Fort University?
Yes, you can order your custom case study solution for the Harvard business case - "Esusu: The Missing Link in Credit Reports" at Fern Fort University. You can get a comprehensive solution tailored to your requirements.
Can I hire someone only to analyze my Esusu: The Missing Link in Credit Reports solution? I have written it, and I want an expert to go through it.
🎓 Struggling with term papers, essays, or Harvard case studies? Look no further! Fern Fort University offers top-quality, custom-written solutions tailored to your needs. Boost your grades and save time with expertly crafted content. Order now and experience academic excellence! 🌟📚 #MBA #HarvardCaseStudies #CustomEssays #AcademicSuccess #StudySmart Pay an expert to write my HBR study solution for the case study - Esusu: The Missing Link in Credit Reports
Where can I find a case analysis for Harvard Business School or HBR Cases?
You can find the case study solution of the HBR case study "Esusu: The Missing Link in Credit Reports" at Fern Fort University.
Which are some of the all-time best Harvard Review Case Studies?
Some of our all time favorite case studies are -
Can I Pay Someone To Solve My Case Study - "Esusu: The Missing Link in Credit Reports"?
Yes, you can pay experts at Fern Fort University to write a custom case study solution that meets all your professional and academic needs.
Do I have to upload case material for the case study Esusu: The Missing Link in Credit Reports to buy a custom case study solution?
We recommend to upload your case study because Harvard HBR case studies are updated regularly. So for custom solutions it helps to refer to the same document. The uploading of specific case materials for Esusu: The Missing Link in Credit Reports ensures that the custom solution is aligned precisely with your needs. This helps our experts to deliver the most accurate, latest, and relevant solution.
What is a Case Research Method? How can it be applied to the Esusu: The Missing Link in Credit Reports case study?
The Case Research Method involves in-depth analysis of a situation, identifying key issues, and proposing strategic solutions. For "Esusu: The Missing Link in Credit Reports" case study, this method would be applied by examining the case’s context, challenges, and opportunities to provide a robust solution that aligns with academic rigor.
"I’m Seeking Help with Case Studies,” How can Fern Fort University help me with my case study assignments?
Fern Fort University offers comprehensive case study solutions, including writing, analysis, and consulting services. Whether you need help with strategy formulation, problem-solving, or academic compliance, their experts are equipped to assist with your assignments.
Achieve academic excellence with Fern Fort University! 🌟 We offer custom essays, term papers, and Harvard HBR business case studies solutions crafted by top-tier experts. Experience tailored solutions, uncompromised quality, and timely delivery. Elevate your academic performance with our trusted and confidential services. Visit Fern Fort University today! #AcademicSuccess #CustomEssays #MBA #CaseStudies
How do you handle tight deadlines for case study solutions?
We are adept at managing tight deadlines by allocating sufficient resources and prioritizing urgent projects. Our team works efficiently without compromising quality, ensuring that even last-minute requests are delivered on time
What if I need revisions or edits after receiving the case study solution?
We offer free revisions to ensure complete client satisfaction. If any adjustments are needed, our team will work closely with you to refine the solution until it meets your expectations.
How do you ensure that the case study solution is plagiarism-free?
All our case study solutions are crafted from scratch and thoroughly checked using advanced plagiarism detection software. We guarantee 100% originality in every solution delivered
How do you handle references and citations in the case study solutions?
We follow strict academic standards for references and citations, ensuring that all sources are properly credited according to the required citation style (APA, MLA, Chicago, etc.).