In what is set to revolutionise credit scoring and increase financial inclusion in Kenya, a new company is targeting your smartphone to make this possible.

Credit scoring fintech company, CredoLab, has launched in Kenya seeking to ‘drive financial inclusion’ by credit scoring more people.

The company is especially seeking those who are new to banking and new to credit (loans).

Opening up your world to faceless entities

CredoLab has announced that it is in negotiations with the large financial institutions, digital banks, credit bureaus, consumer lenders and retail operations in Kenya.

If the company successfully enters the market, it means that all your details on the phone will be available to all the parties opening up your world to faceless institutions for loans.

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.”

The drive for this is that a fair percentage of people in Kenya remain neglected by the financial sector and are invisible to lenders.

This is because, allegedly, they lack comprehensive data for risk assessment.

The company says in a statement that 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 was launched in 2016 in Singapore with the goal of solving one problem: the lack of instruments available to assess the creditworthiness of nearly two billion consumers globally,” says Massain.

CredoLab collects more than 50,000 data points from a customer’s smartphone

CREDOLAB

Snooping ‘propriety mobile technology’

He adds that by harnessing the power of Artificial Intelligence (AI) applied to smartphone data, they enable financial institutions to grow by reaching new segments previously inaccessible through traditional systems.

CredoLab collects more than 50,000 data points from a customer’s smartphone through a state-of-the-art propriety mobile technology and turns them into more than 500 thousand behavioural features.

Their collection process is always consensual and permissioned, adds the statement saying 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,” adds Massain.

CEO and Co-Founder of CredoLab, Peter Barcak says, “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.”

CredoLab says that by making granular credit assessments possible, their clients have seen results like 20% higher new to bank customer approvals, a 15% reduction in non-performing loans, and a 22% dip in fraud rate.