Big Data, Small Credit: The Digital Revolution and Its Impact on Emerging Market Consumers

This research report sheds light on a new cadre of technology companies who are disrupting the credit scoring business in emerging markets. Using non-financial data—such as social media activity and mobile phone usage patterns—complex algorithms and big data analytics are forever changing the economics of how we identify, score, and underwrite credit to consumers who have been invisible to lenders until now.

"Big Data, Small Credit" looks into the challenges ahead of these new businesses and brings the voice of the consumers into play. An in-depth survey in Kenya and Colombia reveals that early adopters have a sophisticated understanding of the privacy trade-offs these new technologies entail and a clear notion of what constitutes a breach of trust.

The report also brings recommendations to key stakeholders in this nascent ecosystem. It encourages financial services providers to enhance their existing consumer credit risk assessment platforms and warns policymakers on the perils of stifling innovation—and curtailing positive economic impact—by regulating this segment too soon.