Credit Scoring the Informal Worker

From Bankelele Mon Dec 24 2012, 14:31:00

Documenting the informal economy has been a challenge, the importance of which is increasingly being seen in recent banking, real estate, consumption and other economic statistics that, thanks to data from Telco's about m-pesa and other money transfer systems, shows up as a grey ocean of money flowing (daily) through the economy that amounts to a significant fraction of Kenya's GDP.

But how about the users who are moving this money? Can they derive credit worthiness value from this information that is being captured? i.e. These are the self-employed workers, and people without payslips or steady banking habits, but who have some scanty history with banks, savings societies, church groups, or utility companies.

But now with services such as SelfCare from Safaricom, one can see three months of M-Pesa transactions - and in the last three months, funding a project outside Nairobi, I've deposited about $3400, sent about $2800, withdrawn $200, received $150, and bought $100 of airtime.

All that should qualify for more than a Khs 2,000 ($25) instant loan from Safaricom/CBA's, M-Shwari, but since it's a new system, it may be too early to determine the credit worthiness of a borrower, using their M-Pesa history alone. Selfcare could, with time, become more useful, allowing users to export or print statements, older than three months, and other financial institutions to access & review the data - and with that, a hawker, taxi driver, or other self-employed worker, without a formal banking history could generate a decent, mature, credit position to discuss with a new bank.

[view whole blog post ]
 See More    |     Report Abuse


You might also be interested in the following news stories:

Nigeria:  Saraki Canvasses Support Against World's 'Greatest Enemy' (news)
Premium Times
16 October 2017

The president of the Nigerian Senate, Bukola Saraki, has called on world leaders to join forces to eliminate terrorism, which he described as "the greatest enemy". At during a bilateral meeting with ... [read more]

Liberia:  Runoff Lobbying Under Way - Weah, VP Look to Build Alliances (news)
FrontPageAfrica
16 October 2017

With 95.6% of polling places from ballot stations across Liberia reporting, it is looking increasingly likely and mathematically obvious that this year's Presidential race is headed to a run-off ... [read more]

Somalia:  Protesters Weep at Aftermath of Deadliest Terror Attack in Mogadishu (news)
Voice of America
16 October 2017

The death toll from Saturday's massive truck bombing in the Somali capital Mogadishu - the deadliest terror attack in the country’s history - has topped 270. Abdirahman O. Osman, Somalia's ... [read more]



blogAfrica is allAfrica.com's platform to help you keep an ear on the African blogosphere. We draw diverse voices from around the world who post regularly and insightfully about African issues. Bloggers, submit your blog's rss-feed!