By Anthony Onyango, Head of Credit Lipa Later Group.
Africa’s Digital Credit Sector is drastically improving daily and Lipa later is at the forefront of this revolutionary change.
The continent is observing a massive shift from the contemporary front office banking halls and strenuous credit approval processes that were characterized by long Ques and paperwork to the now Mobile transactions that could see one qualify for Credit within minutes of registration.
Kenya is one country leading in this aspect with most of its financial institutions embracing AI and Machine learning and developing Apps such as KCB MBenki, Co-op Bank Mcoop cash, and Absa Banking App amongst others.
Banks like Equity attributed their profitability stating that the bulk of customers’ engagement and consumption of banking products and services is now on digital channels of the internet and mobile on self-service devices delivering a 24-hour banking experience and most importantly – convenience.
Organizations such as Safaricom through its Mshwari and Fuliza platforms are achieving in a Day what 10 Banks can do in 3 years. According to data from Safaricom, Fuliza alone has hit a disbursement of Kes 288 Billion with an average of 1.57b per day.
With this new phenomenon, most credit managers have now faced a new nightmare of default risk management. This is why a number of firms consistently acquire the best technology when it comes to analyzing their consumers.
With the availability of various credit applications and multiple options, most borrowers found themselves in an unfamiliar space of Negative Credit Listing.
Today, the focus is now shifting from the negative listing of customers as a reactive way of curbing the rising default rates to providing financial Literacy and rehabilitation framework and allowing the economy to recover while still allowing access to much-needed credit.
Our broad approach as Lipa Later is to offer consumers easy access to credit in order to be able to acquire goods and services they may need. Our goal is to use credit to empower the lives of consumers, hence we consider ourselves a responsible lender.
Lipa Later uses Data Analytics to observe both transactional and behavioral patterns of its customers through a proprietary Algorithm and uses this to credit score its clients and unlock their credit potential enabling them to Buy Now & Pay Later.