A credit score is more than just a gauge of how well you pay your bills, it’s a ticket to financial inclusion.

Unfortunately for many in South Africa having a credit score is a distant dream as getting a credit score requires having credit somewhere and being able to pay that credit back.

Which is why a solution from firm CredoLabs stoked our interest.

The firm has developed a technology that allows lenders to assess an applicant’s risk and ability to pay back credit, using data gleaned from the person’s smartphone.

“CredoLab was 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,” explains sales director for CredoLabs in Europe and Africa, Michel Massain.

“By harnessing the power of Artificial Intelligence applied to smartphone data, we 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,” adds the director.

CredoLab’s solution collects 50 000 data points from a customer’s smartphone and translates them in 500 000 behavioural features. The process requires a user’s consent and all data is anonymised. CredoLabs says that user data is never shared with third parties.

CredoLab is currently in talks to bring the technology to South Africa. Careful to not name names, the firm says it signed up a “large bank”, a new digital bank and an airtime credit provider.

There’s no word yet on when we’ll start seeing CredoLab’s solution rolled out into the wild but we do hope it has the desired outcome.

[Image – CC 0 Pixabay]