You must be asking yourself how mobile phone loans companies in Kenya gauge how much money they should lend you. Quick loan apps have a way of measuring your credit worthiness by literally invading your MPESA transaction history and sometimes even check how you use airtime or transaction via your bank to come up with a loan limit. Now Singaporean fintech app CredoLab has landed in Kenya with an aim of evaluating your credit scores and sharing them with digital lenders.
The company is targeting people who are yet to ever take mobile loans and do not have bank accounts. It is already negotiating with digital banks, retailers, financial institutions and other players in the digital lending industry for collaborations.
“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,” said Michel Massain, the head of Sales for Europe and Africa at CredoLab.
The company is driven by the mission of enabling ‘financial inclusion’ in the Kenyan market where they will use Artificial Intelligence to gather smartphone data of new segments that have never been reached before by the current traditional credit scoring methods.
How the CredoLab system works demands that a targeted consumer gives consent for collection of 50,000 data points that are then converted to 500,000 behavioural features which are studied.
The digital scorecards are then customized for lending clients according to their requirements and risk appetite. The result is that the lender will make an informed decision about giving credit to people whose loan applications would otherwise not have been approved when using the tradition methods.
“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,” said Massain.
CredoLab says their system has enabled 20 percent higher new to bank customer approvals, a 15 percent reduction in non-performing loans, and a 22 percent dip in fraud rate across the markets they are already operating in. CredoLab app entry in Kenya will be watched closely by other fintech companies.