In a fast-growing digital era, businesses need to find new ways to stay relevant in a competitive credit market. Billy Owino, CEO TransUnion Africa: Kenya, unpacks four key factors to consider when engaging with customers in the digital era.
In an article I recently shared on social media, esteemed Professor Calestous Juma so brilliantly summarised the role of mobile technology in Africa: what started as a simple service has evolved into the infrastructure upon which new businesses can be built. And the mobile loan industry is no exception.
Think about it: there are more registered mobile money accounts in sub-Saharan Africa than the rest of the world combined. About five million Kenyan customers have a mobile loan. The number of Kenyans who access financial services on mobile phones is more than double those who have bank accounts, and 99% of internet users go online from their mobiles.
The mobile loan market is moving—fast—and if you want your business to remain relevant, you must move with it.
There are four key requirements I believe businesses must meet in order to successfully offer credit on a mobile platform, and these I’ve set out below. Our recently launched, world-first TransUnion Mobile Scorecard ensures that lenders are able to achieve all these objectives and contribute to a more efficient, responsible lending environment.
Make credit solutions available on mobile devices
It amuses me when people are surprised at the high mobile penetration rate in Africa. In Kenya alone, we have a rate of 88.2% comprising 38.9 million mobile subscriptions. Mobile devices are the future of customer engagement. If early adopters take advantage of this opportunity, they can set themselves apart from competitors and strengthen consumer relationships.
Enable swift, instant credit decision on these platforms
From the vendor on the shores of Kisumu to the emerging entrepreneur in the streets of Nairobi, customers want fast, secure access to mobile loans. Quantity and quality go hand in hand: you need to be able to process a lot of information very quickly if you want to meet consumers on this platform of choice. Better customer interaction means better customer retention.
Do this without increasing risk
Having said that, being able to provide mobile loans quickly and efficiently means nothing if you are putting your own business at risk. Extending mobile loans to a larger audience and significantly improving your bottom line must be balanced with the ability to reduce lending risk.
Promote responsible credit extension
As business leaders, it is our duty to create enabling environments for current and future generations of local entrepreneurs and businesses whose enterprising spirit powers our economies. People are going to get loans, one way or another, and there are many lenders out there who are just too happy to help—but often at a high cost to the customer. Credit providers must step in to ensure that customers take loans responsibly and safely.
This is where the TransUnion Mobile Loan Scorecard, a world-first, has a crucial role to play.
Using their mobile devices, consumers send the lending institution minimal information, such as their name and identity number, and the Scorecard quickly delivers a recommended outcome—Approve, Decline or Refer—based on the lender’s internal credit policies and an accurate assessment of credit risk.
Small and medium businesses in East Africa are resourceful and creative, yet many entrepreneurs lack the time and support they need to innovate in their businesses. A reliable, secure mobile loan solution is key to helping them get access to the resources they need, safely and quickly, to further their businesses.
Information is not just numbers and data; it is an empowering tool. The Mobile Loan Scorecard uses the most complete, multidimensional information available to help businesses extend the right credit, to the right people, on the right terms. By doing so, they are part of a nationwide initiative to clean up the mobile lending industry and make sure we work together for the betterment of the people—and this is what we at TransUnion call Information for Good.