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Global analytics firm FICO and TransUnion Kenya have joined forces to expand access to credit in Kenya, leveraging advanced data analytics to improve risk assessment and financial inclusion.
A Data-Driven Approach to Credit Decisions
The collaboration integrates TransUnion’s CreditVision Variables solution with the FICO Score, providing lenders with enhanced insights into consumer credit behavior. According to a joint press release on February 18, the initiative aims to empower lenders to make more informed decisions, foster economic growth, and strengthen Kenya’s financial ecosystem.
CreditVision Variables utilizes more than 145 data sources and analyzes up to two years of historical payment data, offering a more detailed view of consumer financial behavior. Meanwhile, the new FICO Score, designed specifically for the Kenyan market, is powered by proprietary predictive analytics and a dataset of over 4 million records from TransUnion’s database.
“Enhancing traditional credit risk strategies with the FICO Score and comprehensive data analysis can improve risk predictability and enable lenders to extend financial services to more consumers,” the statement noted.
Boosting Risk Predictability and Loan Approvals
In other global markets where CreditVision Variables has been implemented, lenders have reported a 20% to 30% improvement in risk predictability. This enhancement has led to higher loan approval rates, increasing by 15% to 20%, ultimately expanding access to financial services for underserved consumers.
BNPL Data Integration in Credit Scoring
This partnership follows FICO’s recent move to incorporate Buy Now, Pay Later (BNPL) data into its credit score analysis. The company, in collaboration with BNPL provider Affirm, conducted a study on how BNPL usage impacts credit scores.
Key findings from the study include:
- 85% of consumers who opened a new BNPL account saw either a positive or neutral impact on their FICO Scores.
- Incorporating BNPL data improved credit score predictiveness for lenders, enhancing risk assessment accuracy without negatively affecting borrower evaluations.
“Given the growing popularity of BNPL loans, understanding how to effectively capture their impact on FICO Scores is crucial,” said Ethan Dornhelm, Vice President of Scores and Predictive Analytics at FICO.
As Kenya’s digital economy continues to grow, the FICO-TransUnion collaboration is expected to play a pivotal role in expanding credit access, particularly for underserved consumers. By leveraging advanced data analytics and AI-driven risk assessment, the partnership aims to foster financial inclusion and support the country’s evolving credit landscape.
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