Experian, MTN’s Chenosis Sign Partnership pact — Move to Drive Financial Inclusion3 min read

Under the partnership, Experian will access consented data from MTN’s mobile customers to establish alternative risk metrics.

Consequently, incorporating information about airtime and data purchase patterns can be used to help boost a consumer’s credit score or generate a new alternative credit score, allowing more consumers to gain access to credit.

The partnership was consummated at the ongoing Mobile World Congress Africa 2023 in Kigali (MWC Kigali 2023), Rwanda, yesterday.

“Additionally, what makes this partnership unique is the technical capabilities brought by Chenosis, which will enable real-time access via API to this alternative data – a game changer for the credit-excluded consumer in South Africa.

Although there are an estimated 25 million credit-active consumers in South Africa, more than 20 per cent of the population remain unbanked and rely on cash for their transactions.

Financial inclusion plays a pivotal role in combatting poverty and contributing to inclusive economic growth,” a release issued at the conference attended by hundreds of industry experts and leaders said.

The release said financial access for unbanked individuals can improve daily living, empower consumers and businesses, and reduce income inequality, thereby strengthening the resilience of marginalised populations and expanding employment opportunities.

Improving financial inclusion

According to the CEO of Experian Africa, Ferdie Pieterse, “Improving financial inclusion is a core focus for Experian. We are committed to increasing financial health and fair access to credit in all the markets that we operate in.

From a credit bureau perspective, there are millions of ‘thin file’ consumers in South Africa – those with limited or no information on a traditional credit bureau – who find themselves excluded from mainstream finance. They often face more difficulty or high costs when applying for financial products or services.”

Mr Pieterse said an “unscorable” individual is not necessarily a high credit risk – rather, they are an unknown credit risk, adding that many of these individuals pay rent on time and in full each month and buy airtime and data on a consistent, frequent basis and could be great candidates for traditional credit. They just don’t have a traditional credit history to be used as a benchmark.

“We believe that lenders need to go beyond traditional scoring criteria and consider a multitude of non-traditional variables to support their risk assessment processes. Our aim through this partnership is to introduce prepaid data to potentially help build a financial footprint and positively impact the lives of many,” Mr Pieterse noted.

“We believe that leveraging new and more appropriate data sources is the key to bringing more people into the formal credit economy.

To this end, Experian recently launched Up, a web-based app that enables consumers to manage their financial wellness through gamified credit and financial education, budgeting, and the ability to track and manage their credit scores regularly. With the required permission, consumers using the Up app can build an alternative credit score using hundreds of alternative data points.”

Greater access

CEO of Chenosis, Saad Syed, also said in the release that “Chenosis is excited to support Experian’s drive to provide more access to Financial Services for traditionally underserved sectors of South Africa’s population. This use case exemplifies the power of APIs to facilitate consented data between parties in a secure, authorised, authenticated manner, with a clear governance framework to maintain data privacy.

We believe this is just the beginning of our partnership with Experian, and hope to jointly build an API Ecosystem which will solve problems and create opportunities for consumers and businesses by providing a platform to exchange data and services securely via APIs.”