PataScore Is Changing the Face of the Digital Lending Space in Kenya
The advent of mobile loans in Kenya is a good thing for the unbanked and underserved population that does not have access to formal loans from banks. These people do not own bank accounts hence they do not have formal credit histories that banks can use to provide them with credit facilities.
Mobile loans are providing financial solutions in small and large magnitudes depending on one’s needs hence increasing access to financial facilities from 27% to 75% within the last decade. Digital loans are empowering Kenyans financially and improving the quality of life whereby 37% of digital borrowers use digital credit for business while 35% of borrowers use the loans for day-to-day household needs according to the FinAccess Household Survey 2016.
However, the increase of digital lending platforms (to now more than 200 and counting, which is evident from a search of Kenya loans on PlayStore) has increased credit accessibility to a dangerous point where Kenyans are now loan stacking; meaning they are borrowing loans from various platforms at the same time, ending up in a vicious loan cycle.
The above infographic shows that ⅓ of Kenyan digital borrowers have borrowed from more than one digital lending platform. Additionally, 3% of digital borrowers report that they use digital loans for betting purposes, which is a factor in irresponsible borrowing behaviour leading to over indebtedness and with the chances of default being high, many people are at risk of being listed on the dreaded CRB; where currently 400,000 Kenyans (majority being the youth) are chained with debt and listed for defaulting on loans of less than $2 as referenced in the above infographic.
PataScore brings Safety & Sanity back to Digital Lending
PataScore seeks to eliminate the over indebtedness menace through the robust credit scoring that leverages on both conventional and unconventional wider and complete data sets from various internal and external 3rd parties API integrations. PataScore gives you a FREE credit rating that helps you as a borrower to better understand your own data when it comes to spending habits, savings, borrowings, and credit history. This then helps you to know where to improve your credit score to be positive in order to access affordable financial options to climb the ladder that gets you to endless wealth opportunities.
PataScore Academy offers financial education to borrowers who are seeking to understand and improve their credit scores. The financial education program teaches borrowers on savings, responsible borrowing, and debt management as summarised below.
On the lenders side, PataScore benefits digital lenders by suggesting quality borrowers to lend to. How so? When borrowers get their credit scores from PataScore, the platform gives them a range of the loan amounts that they qualify for/can afford and goes further to suggest potential lending platforms.
PataScore credit results include credit data analytics, which lenders can use to make the right credit decisions in order to determine the type of borrower seeking access to their credit facilities and the purpose they use the loan for and not to cure their curiosity needs as stated in the above infographic where 6% and 4% of women and men respectively take loans out of curiosity. As such, lenders will onboard quality borrowers with low defaulting risk, which means great business as it reduces Non-Performing Loans on their Portfolio to less than 10% compared to the average 47% as mentioned in the analysis by Nation above.
PataScore will be the saviour of the digital lending space by encouraging people to make wise financial decisions in order to get desirable credit scores. We encourage borrowers and lenders to get on board and realise the prowess of credit scoring for the long-term that uplifts their businesses and purposeful use of loans to create more wealth.