Credit Scoring the Informal Worker

From Bankelele Mon Dec 24 2012, 09:31:00

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- and in the last three months, funding a project outside Nairobi, I've deposited about $3400, sent about $2800, withdrawn $200, received $150, and bought $100 of airtime.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:   Talks With Boko Haram 'Inching Closer' (news)
Deutsche Welle
19 October 2014

Nigeria's government claims it is close to securing the release of 219 school girls kidnapped in April. More talks with Boko Haram fighters are planned this week. [read more]

Africa:   The Ebola You Haven't Heard About (analysis)
Chatham House
17 October 2014

As the world has rightly focused on the response to the terrible outbreak of Ebola in West Africa, and the new cases in Europe and the US, another unrelated Ebola outbreak has taken place in the ... [read more]

Sierra Leone:   Ebola Threatens Food Supplies (news)
Deutsche Welle
16 October 2014

Food experts predict a food crisis if Ebola continues to spread. The Word Food Program (WFP) has provided food aid to over half a million people but still needs to reach six times that ... [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!