The Apps you install on your phone often mine your data so as to use it in both legal and illegal ways.
Mobile loan companies in Kenya will move away from the traditional financial messages (MPESA, Bank etc) to start using phone models, games, and even missed calls to determine whether one can get a loan, now much one qualifies for or not.
It is sinister that Tala, which suffered a blow by being banned from listing its loan defaulters on CRB has been deliberately bombarding defaulters with phone calls some of which are hanged-up after 2 seconds. Is this their way of destroying one’s future credit rating?
“Personal data can only be used with the person’s consent however practice shows that openly sharing additional information increases a creditor’s trust,” said Creditinfo Head of East and Southern Africa, Kamau Kunyiha said on the new development.
The new move also determines whether one can buy goods on installment.
A recent conference “Scoring Kitchen” by Creditinfo addressed what is new in the scoring process.
The analysis shows that even how long people stay on one telecom operator’s services shows their financial trustworthiness.
The longer someone uses the same telco’s services, the more financially reliable their loan-payment history is while customers who frequently change operators demonstrate a higher level of risk.
Those without 4G and who use minimal mobile internet are also considered a higher-risk group.
Creditinfo analyst Allan Anyona notes that individuals who are less financially reliable tend to have more modest internet plans and rush to connect as quickly as possible to free Wi-Fi networks at home and elsewhere.
Moreover, it was observed that the more advanced the network connection a potential customer’s phone supports, the greater their creditworthiness.
Many missed calls points to a frequent debtor as creditors get useful insights about whether a potential customer often fails to answer incoming calls.
People were divided into five categories: those who fail to answer calls very often, often, an average amount, rarely, and very rarely.
It turns out the most financially reliable were those in the last two groups.
“We assume that people experiencing financial difficulties avoid answering calls as they do not want to talk with creditors or with relatives to whom they may also be in debt,” the Creditinfo Group analyst said.
With smart devices revealing increased information about consumers, creditors are eager to actively look at other habits too like the use of a mobile wallet.
The more punctually a customer tops up their mobile wallet limit and the bigger their income, the higher their credit rating will be.
Seeking to get a more objective assessment of a customer’s creditworthiness and to automate the decision-making process, psychometric data are being used ever more actively.
A future customer may be asked to play a quiz that takes 5-7 minutes and their response could determine their credit worthiness.
Kamau Kunyiha says the challenges of the pandemic in 2020 are also changing the rules for rating businesses.
New factors have arisen that impact credit scores.
For instance, a new indicator for the impact of Covid-19 has altered the current ratings of companies all over the world.
It shows how the coronavirus pandemic has impacted every area of business (e.g., tourism, hotels, manufacturing, transport, etc.) and how companies’ creditworthiness relates to the geographic location of their operations, demand for the goods they produce, and possibilities for quickly recovering after restrictions and quarantine end.
Businesses’ ratings are also heavily influenced by a ‘Collection’ indicator that reflects whether a company punctually settles with its creditors.
“We have no doubt that the new factors that are coming up will have an increasing significance for companies’ credit scores – in a time of economic turmoil, it’s very important for creditors to objectively assess every customer’s riskiness and make the most accurate decisions possible,” he said.
There a bill in the National Assembly, the Central Bank of Kenya (Amendment) Bill of 2020 which seeks to tame rogue mobile loan lenders.
MPs will review and debate the proposed law that if passed will bring tens of digital and mobile lenders under the watch of the Central Bank of Kenya (CBK).
Last year, CBK banned over 330 mobile loan lender from listing defaulters with the Credit Reference Bureaus (CRBs)
Covering news about Eastlands especially Umoja, Kayole and Buruburu estates