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- and in the last three months, funding a project outside Nairobi, I've deposited about $3400, sent about $2800, withdrawn $200, received $150, and bought $100 of airtime.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

Afrique:   Un colloque du CODESRIA sur les régimes de sécurité prévu en septembre à Bamako (news)
allAfrica.com
29 August 2016

Le Conseil pour le développement de la recherche en sciences sociales en Afrique (Codesria) organise une conférence de dialogue politique les 28 et 29 septembre à Bamako, Mali. ... [read more]

Afrique:   Les disparités entre les genres coûtent 95 milliards de dollars US par an au continent (press release)
United Nations Development Programme
29 August 2016

Le développement sera sensible à la dimension de genre ou ne sera pas Les disparités entre les genres coûtent quelque 95 milliards de dollars US par an en moyenne ... [read more]

South Africa:   Duo to Make Musical Collaboration with Supercomputer (news)
News24Wire
29 August 2016

A Cape Town duo is set to become one of the first bands in the world to produce a song in collaboration with a supercomputer. The electronica outfit Original Swimming Party (OSP) is an audio-visual ... [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!