Alternative credit scoring fintech company, CredoLab, launched in Kenya recently is lined to drive financial inclusion by credit scoring more people, especially those who are new to bank and credit.
CredoLab announced that it is in negotiations with the large financial institutions, digital banks, credit bureaus, consumer lenders and retail operations in Kenya.
Michel Massain, Sales for Europe and Africa at CredoLab says,
“With the trend in Kenya of banks shifting from traditional banking halls to digital platforms, our alternative credit scoring technology is perfectly timed to help lenders provide access to sections of the population that have been traditionally financially excluded.”
CredoLab was launched in 2016 in Singapore with the goal of addressing the lack of instruments available to assess the creditworthiness of nearly two billion consumers globally. By harnessing the power of Artificial Intelligence applied to smartphone data, the firm enables financial institutions to grow by reaching new segments that they weren’t able to access through traditional systems, at a lower cost of risk, based on real-time decisions.
A fair percentage of people in Kenya remain neglected by the financial sector and are invisible to lenders because of a lack of comprehensive data for risk assessment. Existing options for the underbanked are limited, traditional credit scoring is simply inadequate, and as a result, many turn to informal money lending with excessive interest.
CredoLab collects more than 50 000 data points from a customer’s smartphone through its mobile technology and turns them into more than 500 thousand behavioural features. Their collection process is always consensual and permissioned. The collected data is anonymised, securely stored within the country, and never shared with third parties. All digital scorecards are customised for clients, whose requirements, risk appetite and credit scoring thresholds are unique.
This use of non-traditional data and predictive analytics for credit scoring enables lenders to expand their pool of borrowers while keeping risks under control.
“Millennials, new graduates, self-employed and other thin credit history customers increasingly try to access credit, but to no avail. Here, digital scorecards help provide predictive insights into borrower behaviour, thereby redefining credit-decisioning,” Massain adds.
Commenting on their vision for the country, CEO and Co-Founder of CredoLab, Peter Barcak says, “We are excited about our launch into Kenya, where a percentage of people remain locked outside of the mainstream economy because they do not have the credit history in the traditional sense to participate in it.”
With plans to expand further into other countries on the continent, Barcak adds, “Our hope is that CredoLab will help to remove a key barrier to entry in Kenya, among other African countries and complement traditional credit scoring systems with the power of behavioural data.”