GnuGrid CRB and Airtel Mobile Commerce Uganda Limited (AMCUL) have launched Uganda’s first mobile credit scoring system, named “Mobile Credit Score.” This innovative solution, licensed by the Bank of Uganda, utilizes over 400 alternative data points, including mobile financial behavior, to provide a comprehensive credit score. Unlike traditional credit reports, it goes beyond relying solely on credit history from regulated financial institutions.
David Opio Obwangamoi, Executive Director of gnuGrid CRB, highlighted the significance of digital transformation in lending, emphasizing the use of alternative data to ensure a holistic evaluation of creditworthiness. The system aims to open doors for a broader spectrum of borrowers often overlooked by traditional models.
The Mobile Credit Score is expected to enable millions of Airtel subscribers to access affordable credit. It will later extend to Airtel’s lending partners and all lenders within Uganda’s financial ecosystem, including Tier I-IV financial institutions, non-bank payment service providers, and payment system operators.
Under Uganda’s National Financial Inclusion Strategy (NFIS) II (2023-2028), the government targets increasing access to formal financial institutions from 66% in 2021 to 75% by 2028. Additionally, private credit bureau coverage is expected to grow from 6.9% of adults in 2019 to 15% by 2028.
The World Bank’s Global Findex Database 2021 indicates that 66% of Ugandan adults have access to a regulated financial account, primarily driven by mobile money penetration. However, only 31% borrow from formal financial institutions. The Mobile Credit Score aims to address challenges in assessing creditworthiness and promote efficient and cost-effective borrowing and lending.
Japhet Aritho, AMCUL Managing Director, expressed excitement about the partnership, emphasizing its potential to empower more people with access to credit and support their aspirations. The Mobile Credit Score is expected to filter out high-risk borrowers, reduce credit defaults, and facilitate the creation of tailor-made products for lenders.
The solution received acclaim from government and private sector stakeholders, aligning with Uganda’s economic development strategy focused on financial inclusion, responsible lending, and technology-driven empowerment. Pascal Mukisa from the Bank of Uganda commended gnuGrid for its local initiative, and Edith Tusuubira of the Uganda Microfinance Regulatory Authority praised the credit score’s positive impact on youth and women’s financial access.
Giles Aijukwe, CEO at Letshego Uganda, highlighted the Mobile Credit Score’s role in solving information asymmetry challenges for lenders, especially those serving the bottom of the pyramid. Patrick Oketa of Financial Sector Deepening Uganda and Arnold Byarugaba of the Mastercard Foundation emphasized the potential of alternative credit scoring in bringing financial access to the majority who remain excluded.
The Mobile Credit Score represents a significant leap towards financial inclusion, offering opportunities for borrowers to know their creditworthiness instantly, access credit faster, and sustainably grow their loan limits. The system’s efficient and cost-effective approach is expected to contribute to reduced lending operational costs and, consequently, a lower cost of credit in the medium term.
