The San Francisco-based startup Divine Research has issued tens of thousands of unsecured loans, offering a new approach to financing in underserved areas.
Divine Research's Unsecured Lending Model
Since 2024, Divine Research has issued around 30,000 unsecured loans, mostly under $1,000. The founder, Diego Estevez, stated, 'We’re lending to ordinary people—vendors, teachers, gig workers.' The interest rates range from 20% to 30%, while the company absorbs roughly 40% of defaults on first loans.
Identification and Risk Management
What makes Divine unique is its reliance on biometric verification, using World ID's iris-scanning technology. This ensures each borrower is a unique individual and effectively blocks repeat defaults. Some losses are offset by reclaimable Worldcoin tokens granted to borrowers.
Trends in Crypto Lending
With the growing interest in unsecured lending, other startups like 3Jane are taking different approaches, including income and asset verification. Meanwhile, major institutions like JPMorgan are exploring options for asset-backed loans, including Bitcoin and Ether.
Despite warnings stemming from the collapse of several lenders in 2022, companies like Divine Research are seeking ways to integrate decentralized financial solutions with new digital identification tools.
