Airtel Mobile Commerce Uganda, the Fintech division of Airtel, has partnered with GnuGrid, a credit reference bureau firm, to introduce the Mobile Credit Score solution. This collaboration aims to track the creditworthiness of mobile money users, facilitating the extension of microloans to subscribers.
The Mobile Credit Score solution, unveiled in Kampala, will support the development of a mobile credit scoring system to enable micro-lenders to monitor borrower risk profiles. Initially, the system will generate a mobile credit score for every Airtel Money account, enhancing user reputational collateral and determining the growth of user financial responsibility and trustworthiness.
David Opio Obwangamoi, the Founder and CEO of GnuGrid, emphasized that the solution not only simplifies the extension of microloans but also contributes to building trust within the financial ecosystem. Mobile money loans have become significant products in the financial markets, with at least Shs31.5 billion worth of loans advanced to mobile money borrowers monthly, according to Ministry of Finance data.
Telecoms currently rely on subscriber behavioral trends to determine borrowing limits. The Mobile Credit Score solution will play a crucial role in lobbying for lower interest rates, especially for borrowers with timely repayments. Additionally, user data will be shared with other lenders in Uganda to streamline credit access and limit multiple borrowing.
Japhet Aritho, the Managing Director of Airtel Mobile Commerce, stated that the partnership will empower more people with access to credit, acting as a key catalyst for growth and development. However, the Uganda Bankers Association urged Airtel and GnuGrid to be vigilant in protecting user data and ensuring that users’ credit scores are not compromised.
“Safeguards around data protection, minimizing the risk of manipulation, and others will be important so that lenders can rely on the solution,” said Wilbrod Humphrey Owor, the Executive Director of the Uganda Bankers Association.
