Karma is a collaborative effort to protect operators in the financial ecosystem from bad actors. Who are bad actors? Bad actors are individuals that are always trying to explore the financial space and its loopholes to discover ways to dupe operators in the space or have even duped them in the past or defaulted on loans without intent to pay back.
Karma provides a solution to this challenge through community and alliance. Karma is a privately sourced blacklist that collects, tracks and shares the profiles of know bad actors. Karma receives its contributions from its community members and alliance. With this collaborative strategy, each member of the community provides a measurement of protection to the other.
As a lender on the Pecunia platform, you have access to this wealth of data and you are also offered this community protection.
Karma as a Decision Model Module
During credit scoring that happens when a user applies for a loan, a borrower is checked against Karma. The karma module is usually the first module that the borrower is checked against. If a borrower is found in Karma, the borrower immediately becomes ineligible for the loan. This check is done by the system.
Karma as a Blacklisting and Search Engine
An admin on Pecunia with the right permission has the ability to blacklist a user if they suspect any funny or hanky panky behavior or if a borrower has maliciously refused to repay his loan. The funny or hanky panky behavior that will lead to an admin blacklisting a user needs to be gross.
An admin can also manually add a borrower’s record to Karma on the Karma page. The difference here can be a situation where the borrower to be blacklisted is not yet onboarded on the app or a lender is uploading their own existing blacklist record.
In addition to adding records to Karma, you can manually search karma for a record.