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- and in the last three months, funding a project outside Nairobi, I've deposited about $3400, sent about $2800, withdrawn $200, received $150, and bought $100 of airtime.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

Eritrea:   25 Years After Independence Eritreans Still Yearn for Freedom (analysis)
The Conversation
23 May 2016

Eritrea marks 25 years of independence from Ethiopia this month. It is now one of the most underdeveloped countries in the world and is run by a repressive government. The Conversation Africa's ... [read more]

Nigeria:   Economic Hardship Will Soon Be Over - Presidency (news)
Leadership
24 May 2016

President Muhammadu Buhari yesterday assured Nigerians that the country was on the path of economic recovery, saying that the hardship aggravated by the recent hike in fuel price would soon be ... [read more]

Nigeria:   Shi'ite Leader Sues Govt for Prolonged Detention (news)
Premium Times
23 May 2016

The Leader the Shi'ite Islamic Movement of Nigeria, Ibrahim El-Zakzaky, on Monday instituted a suit in the Federal High Court against the federal government and the Nigerian military challenging his ... [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!


Today's Featured News
Mozambique Ruling Party Faces Tough Contest

Renamo supporters: Ruling Frelimo faces a stern challenge at Wednesday's polls from...

Surge in Central African Republic Violence

African Union troops in Bangui (file photo): The UN has expressed alarm...

Nigeria, Cameroon, Ghana Get Crucial Wins

Asamoah Gyan of Ghana (file photo): The Super Eagles have boosted their...