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The Bank of Uganda has applauded the recent launch of gnuGrid CRB’s Mobile Credit Score as “a momentous occasion in the credit information sharing space” and a “pivotal moment in the financial sector, and specifically in the credit information, sharing space”.
The game-changing Mobile Credit Score relies on over 400 alternative data points supplied my mobile phone companies such as client mobile financial behaviour as well as transaction volumes and frequency to create a more comprehensive and inclusive credit score for especially the financially underserved and unserved who only rely on mobile money borrowing.
The Mobile Credit Score is the brainchild of the gnuGrid CRB, gnuGrid is Uganda’s first and only indigenous credit reference bureau and Airtel Mobile Money Commerce Uganda Limited (AMCUL), the fintech arm of telco giants, Airtel Africa.
Speaking at the launch of the service, Pascal Mukisa, the Head of CRB Services at the Bank of Uganda said this groundbreaking initiative was a “significant step towards fostering responsible lending and promoting financial inclusion, especially for the unbanked and underbanked population in Uganda”.
“The use of alternative data in credit scoring creates a 360-degree understanding of who a prospective borrower and is his or her ability to pay what is going to borrow. This harnesses both alternative data, as well as the traditional credit information that is collected by the CRBs from the banking sector. And as a regulator overseeing the CRB sector, we recognise the importance of these advancements and the contribution it makes to the stability, efficiency and inclusivity of our financial system,” Mr. Mukisa told stakeholders present at the launch, held at the Kampala Serena Hotel.
“Financial inclusion is a key focus for the central bank. We firmly believe that access to financial services is a fundamental right that empowers individuals and propels economic growth. The introduction of this mobile credit score specifically aligns with our vision for a more financially inclusive ecosystem; reaching the last mile credit consumers and addressing the unique needs of the youth and women in access to finance,” Mukisa added.
He urged lenders to pay special attention to affordability assessment and said the Central Bank was considering compelling credit providers, to be certain and convinced that the individual that were lending to has the ability to pay back.
“With the introduction of this mobile credit score and if more sources of alternative data are harnessed, it will greatly enhance the credit providers’ ability to conduct affordability assessment,” he said adding: “We want to provide assurance that the central bank is tightly monitoring how these products are being developed, and how data privacy and data security is being observed. We have mandated credit bureaus that data, whether in motion or at rest, must be securely guarded. There must be both physical and logical security controls in place to ensure that there is accountability all times in access and usage of this data”.
Mukisa also reiterated the Central Bank’s commitment to putting in place “an enabling environment that will promote innovation, increase financial inclusion, and enable businesses to thrive” which is why in recent times, several adjustments had been made in the policy and regulatory space.
He further said that a number of regulatory amendments, as well as various infrastructure, upgrades were being implemented at the central bank such as a central data hub that will enable the seamless and timely sharing of credit information around the country.
He also applauded gnuGridCRB for being the only indigenous to make giant steps in the credit information sharing space.
“Initially, we thought, that credit information sharing was only a space for international companies from developed countries. But I’m glad and excited to present a local initiative that started from scratch. And surprisingly, within a very short period of time, is now driving the innovation that we’ve all been waiting for, which is addressing challenges to access to credit such as the the requirement to have collateral by especially women and youth who are the majority of our population and substituting with reputation collateral,” Mukisa emphasised.