Alternative credit scoring in Africa: A new hope for financial inclusion?

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Fintechs, commercial banks and insurers are increasingly deploying AI and machine learning to analyse new-age mobile and web data to expand credit to individuals and small businesses lacking financial footprints. But concerns remain about the reliability of the metrics used and customer privacy, particularly as data protection laws are in their infancy in most countries. A panel of fintechs, banks and regulators assess whether personality tests, mobile wallet behaviors and social media connections can truly replace credit bureau scores where limited credit histories exist.

Key points

• Reliability: Which novel metrics based on mobile and web behaviours offer the most promise to determine creditworthiness and default risk?
• How should Africa’s regulators adapt to protect data privacy and confidentiality?
• What steps should traditional financial institutions take to incorporate alternative credit scoring?

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