Mobile Banking- The Key to Building Credit History for the Poor?

This study seeks to determine whether mobile transaction data can provide the foundation to build a credit information system for the base of the pyramid. It also identifies the level of interest in public-private partnerships from various stakeholders. Mobile network operators (MNO) typically capture payment and transaction histories of populations without formal credit history. They cannot access financial services at affordable rates. Channeling this information will help lender evaluate risk better and increase access to finance for the poor. The study presents an analysis of the mobile-banking sector in Kenya and provides the following recommendations:

• Support mobile platform to increase access to financial services and encourage adoption by MFIs;
• Provide assistance to Kenyan banks to share data with licensed credit reference bureaus;
• Improve enabling environment for credit reference bureaus and clear regulatory authority;
• Support alternative data usage;
• Analyze mobile transaction data to evaluate predictive value;
• Explore business incentive for MNOs.

Finally, the development, financial, telecom and public sectors should identify common interests and partner to harness the full potential of mobile technology.