TransUnion Kenya has partnered with US-based data analytics company FICO to provide financial institutions in Kenya with new credit risk solutions that enhance access to credit.
The collaboration will leverage TransUnion’s CreditVision Variables and the FICO’s Score, to improve risk evaluation and financial inclusion.
CreditVision Variables provides an enhanced view of consumer financial behaviour, analysing over 145 data sources and up to 24 months of historical payment data.
The solution helps lenders make more informed decisions, advancing economic empowerment and building a resilient financial ecosystem.
In other global markets, lenders integrating CreditVision Variables into their credit risk strategies have seen a significant rise in risk predictability by 20%-30%.
TransUnion Kenya CEO Morris Maina said: “The effects of these innovations are expected to be profound. Consumers, Small, Micro and Medium-sized Enterprises (SMMEs) and other businesses can benefit from greater access to credit and financial services, enabling them to improve their financial health and achieve their goals.
“Lenders will have access to better risk management and decision-making tools, leading to greater financial inclusion and economic empowerment, and driving more sustainable overall economic growth and stability.”
The new FICO Score, which ranges from 300 to 850, with higher scores indicating lower credit risk, is designed specifically for the Kenyan market.
It uses unique predictive analytics technology and more than four million records from the TransUnion database to provide effective credit risk assessment.
By enhancing traditional credit risk strategies, the collaboration aims to improve risk predictability and enable lenders to extend financial services to more consumers.
FICO Scores vice president Mike Manaton said: “This level of transparency aids both lending officers and consumers. The FICO Score provides clear insights into the factors influencing a consumer’s score.
“Additionally, it enables lenders to assess applicants more accurately, tailor credit terms accordingly and enable credit access for more consumers.”
According to TransUnion’s Q2 2024 Consumer Pulse Study, financial inclusion in Kenya is improving, with 36% of consumers having access to credit, compared to 33% a year ago.
The increase in credit access is significant, with 60% of consumers planning to apply for new or refinancing existing credit in the next year.
FICO’s new score is said to be impactful in the Kenyan context, where c is prevalent, with 95% of scoreable consumers having at least one microlending tradeline.
The score provides lenders with transparent and actionable insights, offering the top four reasons for using the latest information in the TransUnion file.
Kenya’s Credit Information Sharing Association (CIS Kenya) CEO Jared Getenga said: “TransUnion Kenya’s and FICO’s new credit risk solutions are a game-changer for the region.
“At CIS Kenya, we believe these innovative solutions will empower businesses to make more informed decisions and drive economic growth.”
