TransUnion Africa, a powerhouse in credit and information management, announced a groundbreaking partnership with Chenosis, the continent’s leading API marketplace, during the Mobile World Congress (MWC) Kigali. This alliance aims to revolutionize financial inclusion in South Africa, Rwanda, and Zambia by integrating alternative telecom data into traditional credit scores, a move poised to democratize access to financial services.
Traditionally, credit scores have relied solely on formal credit data, limiting financial opportunities for individuals and small businesses with minimal or nonexistent credit histories. However, this collaboration promises to enhance lenders’ risk predictability by up to 25% by painting a more holistic picture of consumers who previously would have been overlooked.
“Financial inclusion is often hampered by the lack of comprehensive credit information on consumers outside the formal banking system,” explained Lee Naik, CEO of TransUnion Africa. “By incorporating telecoms data, we can bridge this information gap, utilizing consistent mobile phone usage and data purchase patterns to indicate a consumer’s ability to manage regular credit repayments.”
The innovative solution, part of TransUnion’s CreditVision suite, offers a more nuanced view of consumers, particularly beneficial in regions like South Africa where, despite a 70% bank account penetration rate, financial inclusion remains low. Many withdraw their funds immediately after they are deposited, contributing to a scarcity of credit data and opportunities.
The partnership leverages Chenosis’s API to securely obtain consumer consent before sharing their telecom data with lenders, respecting data privacy requirements. This telecom data is not new to risk assessment but has been traditionally confined to decisions on post-paid accounts for mobile operators. Its integration into general credit scoring heralds a new era for financial services.
“The usage patterns, spending habits, and even the nature of calls or frequency of top-ups are rich with insights,” Naik detailed. “These seemingly mundane details can be predictive of a user’s ability to repay debts, mirroring responsible financial behavior.”
Saad Syed, CEO of Chenosis, shared the enthusiasm: “We are thrilled to join forces with TransUnion in this journey towards broadening financial accessibility. This initiative showcases the potential of APIs in facilitating secure, consent-based data sharing, setting a robust governance framework for data privacy.”
By harnessing the untapped potential of telecoms data, TransUnion and Chenosis are not just opening doors for millions of consumers and businesses, they’re also setting the stage for a more inclusive financial future in sub-Saharan Africa. This collaboration is a testament to the transformative power of data-driven insights, breaking down barriers and empowering economic progress.
“This isn’t just about credit scores,” Naik concluded. “It’s about rewriting the narrative of financial inclusion in Africa, paving the way for a future where opportunities aren’t missed due to the lack of a credit history.”
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