Grad Profiles highlight the personal and professional stories of Founder Institute Graduates from across the globe.
This profile on Neo, a Graduate of the Silicon Valley Founder Institute and Grand Prize Winner of the Founder Showcase, was written by Emma Tzeng. Founded in 2010 by Navin Bathija, Neo helps young adults and recent immigrants apply for and obtain auto loans.
It’s hard to disagree that first-time major purchases are both stressful and life-altering. Regardless of the transaction, the process of saving up, researching prices, and doling out x amount of dollars to finally own that special property or automobile you’ve had your eye on is a long, contemplative ordeal that can sometimes make you dizzy in the head.
But what if another layer of complexity were added to the mix? What if credit companies outright refused to issue a loan to you simply because you did not have a credit history? How would you even begin to plan for those first major purchases?
Neo, a “consumer friendly auto loan company,” wants to provide affordable auto loans to consumers who are new to credit, such as young adults and recent immigrants. Instead of relying on traditional credit scoring agencies such as FICO, Neo’s proprietary credit risk assessment technology analyzes the default risk of an individual based on his financial and social data.
Approximately six million first- and second-time car buyers with limited credit histories are on the market each year looking for a loan. On average, 40 percent of these applicants are denied a loan, and the other 60 percent that are approved typically grapple with high interest rates of 10 percent or above.
Neo wants to change the trajectory of auto loans by skewing away from the conventional model of credit scoring. Rather than rely solely on credit history, Neo examines candidates’ financial standing and social data to provide a fuller, more comprehensive picture of an applicant’s potential.
Founded in 2010 by Navin Bathija, a finance and IT professional with 16 years of industry experience, Neo was conceived after Bathija recognized the challenges that Gen Y and recent immigrant car buyers face. With limited incomes and credit histories, these demographics grapple with longstanding impediments when applying for auto loans because the only existing method of measuring financial history is through a credit report.
Currently, Neo is funding auto loans as a part of its private beta loan program. Its mission to help overlooked population groups obtain and refinance car loans by restructuring the application process is one that onlookers should watch for in the years to come.
Learn more about Neo: