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- and in the last three months, funding a project outside Nairobi, I've deposited about $3400, sent about $2800, withdrawn $200, received $150, and bought $100 of airtime.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:

Liberia:   Liberia Keeps Its Foot on the Pedal to End Ebola (news)
allAfrica.com
25 November 2014

The incidence of reported Ebola cases is no longer increasing nationally in Liberia, enabling the United States government to consider scaling back the number of Ebola Treatment Units (ETUs) it is ... [read more]

Egypt:   Govt, UN to Expand Food Aid in Fight Against Child Labour (news)
Thomson Reuters Foundation
25 November 2014

The World Food Programme pledged on Tuesday to expand an aid programme in Egypt that helps poor families keep their children in school and out of the workforce. [read more]

Nigeria:   80 Million Women Suffer Gender Violence - U.S. Embassy (news)
This Day
26 November 2014

The Minister of Women Affairs and Social Development, Hajiya Zainab Maina, on Tuesday called on the National Assembly to pass the Violence Against Persons Prohibition (VAPP) bill, Sexual Offences bill ... [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!