The African fintech scene is as diverse as it is exciting

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Africa is a diverse mix of nations at different stages of their fintech journey.

And no matter where a country is, Creditinfo Group can help them, its Director of Global Markets Burak Kilicoglu mentioned.

A veteran of Experian, Bank of America, Discover Card, Transamerica and Whirpool Financial Corporation, Kilicoglu has a quarter-century of credit risk management experience with international clients in the United States, Europe, Africa and the Middle East. -East.

Burak Kilicoglu

Creditinfo Group is present across the continent, with operations in Morocco, Tanzania and Kenya.

Kilicoglu said providing credit information enables people to access finance through software solutions that analyze data and produce insights supporting innovative strategies, products and services.

Creditinfo Group uses non-traditional data in unique ways

Much of this information is uniquely generated. said Kiricoglu. Non-traditional data is relevant

Africa, as credit bureaus, lacks the historical depth enjoyed by its Western counterparts. But they have rich data sources like utility and telecom data that can be combined with even basic telecom data to facilitate loans and payments.

“These transactions give you enough information to make the key assessment for an individual or organization,” Kiricoglu said.

“When we talk about lending, you have two concepts: capacity and stability. If you have enough transactional information, and if you have the traditional information, then you have very strong data that you can use to make predictions about the behavior of individuals or SMEs quite comfortably, statistically.

West Africa is just beginning its fintech journey

In a recent interview, Poshak Agarwal, CEO of Florence Capital, discussed how India passed the PC generation and went straight to mobile.

Africa has seen similar growth, Kiricoglu said. Governments and corporations use this phenomenon to help underserved groups. In East Africa, many vibrant fintechs contribute to a vibrant ecosystem that provides a range of products and services.

For West Africa, the process is still in its infancy.

“In some West African countries, this process is thriving,” Kiricoglu said. “Telecom operators only look at the wealth of data. They’re trying to couple that with information from the credit bureau, and they start lending processes, but you’re talking about nano-loans.

This is enough because he explained that the parties must establish trust in the system. People are still learning how it works and what they need to do.

“For us to be in the middle of it is pretty exciting because you’re providing the data, but you’re providing the analysis behind it,” Kiricoglu added. “And there is a new educational aspect to that. Here’s what a credit score means to you. Here’s how you can improve your credit score. And that’s why it’s important to you.

The region brings challenges and opportunities

Creditinfo Group uses the successful method of short two to three minute videos that explain basic financial concepts to audiences ranging from individuals to SMEs. Each message is aimed at a specific target group and is combined with sessions held in its offices that explain the basic concepts of credit.

With many Africans living in remote areas, providing financial access is more difficult, Kiricoglu said. Creditinfo Group is a partner of certain financial institutions and international groups such as the International Finance Corporation. Creditinfo Group is developing a portal that brings together information about the various lenders who can offer loans, with the recipient choosing one.

The beauty of these solutions is that they don’t need the latest internet technology to be successful, Kiricoglu said, while acknowledging that connectivity can be patchy in parts of Africa. Fintechs solve this problem by customizing solutions that can get the required information from drop-down menus and other basic methods that use less bandwidth.

“You don’t need the latest technology; older phones and weaker connections are fine,” Kiricoglu said. “This is how you design the solution and how you need to understand the needs, limitations and opportunities of the special group you are interacting with. And you need to customize the solution to their needs. »

Change Agents

Different groups are driving this change across Africa. The IFC or the World Bank takes the lead by conducting research, identifying an area of ​​focus, and bringing governments and fintechs together in certain areas.

In West Africa, governments are generating ideas and looking for partners among the many fintechs looking to make a difference. Some start with the basics like converting utility bills to PDF (with customer consent) to start producing the data lenders need to serve their customers.

“It elevates it to the point where you have both concepts – capacity and stability,” Kiricoglu said. “Once you have those two elements, the next step is the loan decision, and that’s the pattern we’re seeing.”

He added that this happens in dynamic environments with mixtures of languages, cultures and religions. Fintechs serve specific niches in diverse contexts and seek to personalize their message to those who need it most.

Opportunities abound as Africa reaches critical mass of data

Expect another productivity boost shortly, Kiricoglu predicted.

Much of Africa will soon reach a critical mass of data where artificial intelligence can provide even more advanced scoring, helping more people participate in the economy. This will produce specific technologies that provide KYC services, protect against leverage, and target predatory lenders.

“Within a year, we will have enough information to look at artificial intelligence and machine learning-based decisions, the type of predictive models that self-learn, that provide an additional improvement over the traditional model,” Kiricoglu said.

We are at the start of an exciting era, he said. In partnership with Creditinfo Group, governments and international groups, African entrepreneurs marry traditional and non-traditional data and create interactive systems to meet customer needs. Maybe a borrower needs funds for a device but doesn’t have a high enough credit score. They provide Creditinfo Group with positive utility bills and other payment information. Maybe it’s increasing, which means more financial options.

“Those are the score increases you have in the US or the UK,” Kiricoglu said. “It’s basically there for Africa. The fintechs are there, they are very greedy, they are very aggressively looking for opportunities and they are offering relevant solutions. So from that perspective, the acceleration in Africa has started, maybe not at the same level across Africa, but it is certainly accelerating.

“Some countries are looking at other countries. ‘Wow, how does it work here? How can I do it here? If there are regulatory constraints, they go to regulators, they go to governments and say that would like to have that too.

And when these governments are approached, they can turn to Creditinfo Group for information on developments in the regions.

“This interaction is very important because ultimately it is governments, regulators, that influence the market,” Kiricoglu concluded. “If they have the right and timely information about what’s happening in the market, whether it’s regular benchmarking that you do in the market or specific monitoring processes, that provides valuable insight.

“If you can extract relevant information from this information, it is very likely that you will make the right choices. Being that link between the data and the actions providing that information is a very critical position to occupy. »

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