In a groundbreaking collaboration, one of South Africa’s major credit bureaus, Experian, has partnered with Chenosis, which is a cross-industry Application Programming Interface (API) marketplace and an MTN Platform Company, in order to harness data for advancing financial inclusion in the country.
Despite an estimated 25 million credit-active consumers in South Africa, over 20% of the population remains unbanked, relying on cash for transactions. Financial inclusion is vital in addressing poverty and fostering inclusive economic growth. Access to financial services for the unbanked can enhance daily living, empower individuals and businesses, and reduce income inequality, contributing to the resilience and employment opportunities for marginalized populations.
Through this collaboration, Experian will utilize consented data from MTN’s mobile customers to establish alternative risk metrics. By incorporating information about airtime and data purchase patterns, Experian aims to boost consumers’ credit scores or generate new alternative credit scores, facilitating greater access to credit for a broader population.
What sets this partnership apart is the technical capabilities brought by Chenosis, enabling real-time access via API to this alternative data—a significant advancement for credit-excluded consumers in South Africa.
Ferdie Pieterse, CEO of Experian Africa, emphasizes the commitment to improving financial inclusion. Many individuals in South Africa have limited or no information on traditional credit bureaus, resulting in exclusion from mainstream finance. Experian aims to go beyond traditional scoring criteria and consider non-traditional variables, such as prepaid data, to build a financial footprint and positively impact lives.
When non-traditional data sources, like mobile airtime or data payments, are integrated into risk assessments, a more comprehensive and hyper-personalized picture of the consumer emerges. This approach allows lenders to refine risk decisions and expand their target credit universe by assessing risk and predicting performance based on non-traditional data for individuals with no credit track record.
Saad Syed, CEO of Chenosis, expresses excitement about supporting Experian’s drive to provide more access to financial services for underserved sectors of South Africa’s population. This collaboration showcases the power of APIs to facilitate consented data exchange securely and authentically, with a clear governance framework to maintain data privacy.
Experian recently launched Up, a web-based app that enables consumers to manage their financial wellness through gamified credit and financial education. Consumers using the Up app, with the required permission, can build an alternative credit score using hundreds of alternative data points.
Improving financial access for thin-file and credit-invisible consumers is crucial for strengthening the economy. The partnership between Experian and Chenosis exemplifies how leveraging diverse data sources can enhance credit access and decision-making for millions of consumers in South Africa who might otherwise be overlooked.