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To expand financial inclusion and extend much-needed credit to the financially underserved, Airtel Mobile Commerce Uganda Limited (Airtel Money) and Letshego Uganda have launched LetsGo Pesa digital loans.
The unsecured microcredit facility that offers digital loans of between UGX20,ooo to UGX700,000 is made possible by gnuGrid CRB’s Mobile Credit Score.
Launched in January this year, the gnuGrid CRB’s Mobile Credit Score, unlike the traditional and more conservative credit scoring system, relies on over 400 alternative data points, such as client mobile financial behaviour, to create a more comprehensive and inclusive credit score that assesses both the ability and willingness to repay. Since its launch, the Mobile Credit Score has provided a credible and reliable alternative for lenders seeking to extend credit to population segments without collateral or credit history or first-time borrowers.
Airtel Money and Letshego rely on the gnuGrid’s robust credit scoring engine to decide whether to lend and, if yes, how much per borrower.
Key Features of LetsGo Pesa
LetsGo Pesa is designed to be user-friendly and accessible to Airtel Money customers. Some of the key features include:
- Flexible Loan Amounts: Customers can borrow between UGX 20,000/- and UGX 700,000/-, making it ideal for various financial needs.
- Convenient Repayment Period: Borrowers have up to 30 days to repay the loan, providing ample time to manage their finances.
- Simple Repayment Structure: The loan is repaid in one lump sum (bullet repayment) when it falls due, minimising the complexity of repayment schedules.
To access LetsGo Pesa, customers dial the USSD short code *185*8*4# on their Airtel line, select the LetsGo Pesa option, and follow the prompts to apply for a loan. The process is quick and requires no physical documentation or collateral.
To be eligible for LetsGo Pesa, customers must meet the following criteria:
- SIM Card Usage: The Airtel SIM card/line must have been in active (Voice, Data, Airtel Money) use for at least 12 months.
- Mobile Money Activity: Customers must have an active mobile money account with an excellent transactional history.
- Credit History: A clean credit history is required to qualify for a loan.
These criteria ensure the service is accessible to many customers while maintaining responsible borrowing and lending practices.
“This new financial solution is intended to assist customers in meeting their urgent financial needs without the complexities traditionally associated with loan acquisition. Whether it is an emergency medical bill, an unexpected repair, or a temporary cash-flow gap, LetsGo Pesa provides an affordable, instant, accessible solution,” Airtel Money and Letshego said said in a joint statement.
Accessing vital credit quickly, conveniently, safely and collateral-free
“At Letshego, our mission is to improve lives through inclusive financial solutions,” said Giles Aijukwe, CEO of Letshego Uganda. “With LetsGo Pesa, we are leveraging technology to bring financial relief directly to the people, enabling them to access funds quickly, conveniently, and safely without the need for collateral or lengthy approval processes. This partnership with Airtel Money and gnuGrid is a significant step towards expanding financial inclusion in Uganda,” Mr Aijukwe told stakeholders during the launch at Letshego’s offices in Kampala on 12th September 2023.
” Our vision is to create a world where financial services are accessible to all, regardless of location or financial status. LetsGo Pesa is not only innovative but also deeply rooted in the needs of our customers,” Aijukwe emphasised.
Japhet Aritho, the Airtel Mobile Commerce Uganda Limited Managing Director said his firm was “committed to building and maintaining partnerships that increase digital financial access equitably”.
“Letshego Uganda has come at the right time when we are entrenching the culture of good credit behaviour that rewards good borrowers based on their credit scores. We welcome all the partners on this journey that shall extend credit beyond the traditional credit boundaries. LetsGo Pesa is more than just a loan service; it represents a step forward in the financial empowerment of Ugandans,’’ said Japhet Aritho, the Airtel Mobile Commerce Uganda Limited Managing Director.
Speaking at the launch, David Opio Obwangamoi, the Executive Director, gnuGrid CRB said that “the future of lending is purely digital, powered by alternative data and disruptive innovations”.
“Innovation is one of the critical drivers of practical and tangible economic progress. At gnuGrid, our approach to challenges that face the day-to-day lives of typical Ugandans is rooted in our experience as Ugandans, and we innovate around those challenges that we have witnessed first-hand,” he said.
He added that LetsGo Pesa had the potential to massively impact millions of Ugandans.
“In a country like ours, where 70% and above is a young population and about 46% of digital finance are aged between 18 and 35, and that’s quite significant, we believe this product will reach out to young women and men out there who strive every day to change their lives,” Opio said.
Headed that since launch and deployment with various lenders, evidence on the ground shows that the Mobile Credit Score has been able to measure risk accurately.
“That’s what we intended to achieve so that lenders can also be able to deploy risk-based pricing, where the good borrowers can be rewarded with lower interest rates and a higher credit limit, and those that intend to misbehave get some sort of ‘punishment’, to encourage them to do better, to transact more within the Airtel ecosystem, to borrow and repay so that their scores can improve,” he said.
Japhet Aritho testified about the Mobile Credit Score’s robustness, saying that it was one of the most professionally built credit scores on the market.
“This partnership has consumed the most professionally developed credit score, built by a Ugandan company that has beaten any other credit scores I’ve ever accessed. What gnuGrid has done is something that we have evaluated, and we are very, very happy with the ability they have created,” he said.
Letshego’s Giles Germany Aijukwe always praised gnuGrid’s Mobile Credit Score’s sturdiness.
“It’s a very robust score. The reputation of a credit score is very important; when you score, you should score rightly,” he said, adding: “We believe together we’ll scale, we will transform the landscape of credit scoring in this market, and the hitherto excluded people will be able to be included gradually. “
‘Mrs. Edith Tusuubira, the Executive Director of the Uganda Microfinance Regulatory Authority (UMRA), the industry regulator for Tier IV financial institutions such as Letshego, hailed the three companies for pushing the boundaries on credit provision and financial inclusion.
In a speech read for her by Sheila Birungi, the Head of the Legal Department, Mrs Tusuubira said recent fintech product innovations such as LetsGo Pesa were playing a significant role in promoting financial inclusion by enhancing accessibility, reducing the cost of lending, and widening product choice too, especially underserved populations.
She also hailed gnuGrid for its innovative alternative credit scoring mechanism, which she said has made extending credit to individuals usually considered too risky by traditional financial service providers easy.
“FinTechs, therefore, contribute immensely to financial inclusion by leveraging technology innovation and collaborations to provide affordable and accessible financial services to the world’s underserved population,” she said.