CredoLab’s smartphone data-set lined to increase financial inclusion in Kenya

Alternative credit scoring fintech company, CredoLab,  launched in Kenya recently is lined to drive financial inclusion by credit scoring more people, especially those who are new to bank and credit.

CredoLab announced that it is in negotiations with the large financial institutions, digital banks, credit bureaus, consumer lenders and retail operations in Kenya.

Michel Massain, Sales for Europe and Africa at CredoLab says, “With the trend in Kenya of banks shifting from traditional banking halls to digital platforms, our alternative credit scoring technology is perfectly timed to help lenders provide access to sections of the population that have been traditionally financially excluded.”

“You need a credit score to participate in the economy, but what about people who are new to credit and new to bank? How do they get a credit score? How can someone with no credit history get a credit score? And how can they start a business if they can’t lend money to do so?” asked Massain.

A fair percentage of people in Kenya remain neglected by the financial sector and are invisible to lenders because of a lack of comprehensive data for risk assessment. Existing options for the underbanked are limited, traditional credit scoring is simply inadequate, and as a result, many turn to informal money lending with excessive interest.

Massain noted that CredoLab launched in 2016 in Singapore with the goal of solving one problem: the lack of instruments available to assess the credit worthiness of nearly two billion consumers globally is harnessing the power of Artificial Intelligence applied on smartphone data enable financial institutions to grow by reaching new segments that they weren’t able to access through traditional systems, at a lower cost of risk, based on real-time decisions.

CredoLab collects more than 50 000 data points from a customer’s smartphone through a state-of-the-art propriety mobile technology and turns them into more than 500 thousand behavioural features. Their collection process is always consensual and permissioned. The collected data is anonymised, securely stored within the country, and never shared with third parties. All digital scorecards are customised for clients, whose requirements, risk appetite and credit scoring thresholds are unique.

“We are excited about our launch into Kenya, where a percentage of people remain locked outside of the mainstream economy because they do not have the credit history in the traditional sense to participate in it.

Peter Barcak, CEO & Co-Founder, CredoLab

This use of non-traditional data and predictive analytics for credit scoring enables lenders to expand their pool of borrowers while keeping risks under control.

“Millennials, new graduates, self-employed and other thin credit history customers increasingly try to access credit, but to no avail. Here, digital scorecards help provide predictive insights into borrower behaviour, thereby redefining credit-decisioning,” adds Massain.

Commenting on their vision for the country, CEO and Co-Founder of CredoLab, Peter Barcak says, “We are excited about our launch into Kenya, where a percentage of people remain locked outside of the mainstream economy because they do not have the credit history in the traditional sense to participate in it.”

With plans to expand further into other countries on the continent, Barcak adds, “Our hope is that CredoLab will help to remove a key barrier to entry in Kenya, among other African countries and complement traditional credit scoring systems with the power of behavioural data.”

In just three years, CredoLab has mushroomed to become an award-winning business delivering better credit decisions to 51 clients in 15 countries. It has powered almost USD 1-billion in loans issued after analysing about 1 trillion data points. Making granular credit assessments possible, their clients have seen results like 20% higher new to bank customer approvals, a 15% reduction in non-performing loans, and a 22% dip in fraud rate.