Experian, Chenosis delve into alternative risk metrics
Credit bureau Experian has joined forces with MTN-owned Chenosis, an application programming interface (API) marketplace, to leverage data to drive financial inclusion in SA.
According to a statement, through the partnership, Experian will access consented data from MTN’s mobile customers to establish alternative risk metrics.
Incorporating information about airtime and data purchase patterns can be used to help boost a consumer’s credit score, or generate a new alternative credit score, allowing more consumers to gain access to credit.
The technical capabilities brought by Chenosis will enable real-time access via API to this alternative data – a game-changer for credit-excluded consumers in SA, it says.
Launched in 2020, Chenosis allows businesses and developers to publish their APIs so that other developers can discover and utilise them.
The marketplace also provides tools for publishers to monetise and promote their APIs, by creating subscription plans and product bundles that developers and businesses can purchase.
Although owned by MTN, the Chenosis marketplace is a separate brand and entity.
“Improving financial inclusion is a core focus for Experian. We are committed to increasing financial health and fair access to credit in all the markets that we operate in,” says Ferdie Pieterse, CEO of Experian Africa.
“From a credit bureau perspective, there are millions of ‘thin file’ consumers in South Africa – those with limited or no information on a traditional credit bureau – who find themselves excluded from mainstream finance. They often face more difficulty or high costs when applying for financial products or services.”
According to Experian, although there are an estimated 25 million credit-active consumers in SA, more than 20% of the population remain unbanked and rely on cash for their transactions.
The use of alternative data can improve credit access and decisioning for millions of consumers in SA who may otherwise be overlooked, it notes.
These insights help lenders to enhance their risk decisions, refine their provision overlay models based on statistically-proven behavioural variables, and expand their target credit universe by using non-traditional data to assess risk and predict future performance on individuals that have no credit track record, it adds.
Saad Syed, CEO of Chenosis, comments: “Chenosis is excited to support Experian’s drive to provide more access to financial services for traditionally underserved sectors of South Africa’s population.
“This use case exemplifies the power of APIs to facilitate consented data between parties in a secure, authorised, authenticated manner, with a clear governance framework to maintain data privacy.
“We believe this is just the beginning of our partnership with Experian and hope to jointly build an API ecosystem that will solve problems and create opportunities for consumers and businesses by providing a platform to exchange data and services securely via APIs,” he says.