Airtel Mobile Commerce Uganda, the fintech division of Airtel, has joined forces with GnuGrid, a credit reference bureau firm, to introduce a cutting-edge solution aimed at determining the creditworthiness of mobile money users. The Mobile Credit Score solution is set to play a pivotal role in facilitating the extension of micro loans to subscribers.

The innovative system not only promises to track the creditworthiness of mobile money users but also supports the development of a mobile credit scoring system.

This scoring system will empower micro lenders to monitor borrower risk profiles efficiently. The initial phase of the solution involves creating a mobile credit score for every Airtel Money account, enhancing user reputational collateral while simultaneously evaluating the growth of user financial responsibility and trustworthiness.

Mr. David Opio Obwangamoi, the founder and CEO of GnuGrid, highlighted at the launch that the Mobile Credit Score solution goes beyond facilitating loans; it aims to establish a foundation of trust within the financial ecosystem.

He emphasized the importance of building confidence in the micro loans ecosystem and fostering responsible financial behavior.

Mobile money loans have become significant products in financial markets, with Ministry of Finance data indicating a monthly lending volume of at least Shs31.5 billion to mobile money borrowers. Currently, telecoms rely on subscriber behavioral trends to determine loan limits.

The Mobile Credit Score solution is poised to revolutionize this approach, serving as a crucial factor in lobbying for lower interest rates, particularly for borrowers with timely repayment records.

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The strategic partnership between Airtel and GnuGrid aims to empower more people with access to credit, positioning it as a key catalyst for growth and development. However, the Uganda Bankers Association (UBA) has cautioned both entities to prioritize safeguarding user data and ensuring the integrity of users’ credit scores. Mr. Wilbrod Humphrey Owor, the UBA executive director, stressed the importance of implementing robust safeguards to protect against data manipulation and other risks.

As micro loans continue to be scrutinized for their high-interest rates, the introduction of the Mobile Credit Score solution marks a significant step towards fostering financial inclusion, building trust, and mitigating risks in the microfinance sector.

The system’s potential to share user data with other lenders in Uganda is anticipated to streamline credit access while discouraging multiple borrowing.