A typical Kenyan consumer takes a loan every 21 days to bridge their spending gaps and borrows from 2 different digital lending platforms for a loan of Kshs 3,500 twice every month. This representative profile supports the fact that a good proportion of these customers are in the middle of tight debt cycles, some going through as many as 6 different digital lenders. According to a survey report by FSD-Kenya, in partnership with the Central Bank of Kenya (CBK), Kenya National Bureau of Statistics (KNBS) and CGAP on about 3000 digital borrowers, 14% of digital borrowers were repaying multiple loans from more than one provider at the time of the survey which represented about 800,000 Kenyans who were juggling multiple digital loans.
With over 150 different digital lending platforms, this can easily lead to high default rates where the customer is stuck in a perpetual loan cycle when taking one loan from one lender to pay another lender.
The misuse of the readily available mobile lending platforms coupled with lack of knowledge in managing personal financial resource is quickly becoming the largest contributors to financial exclusion (not being able to access the readily available credit facilities) among the majority of consumers and small-scale business owners in Kenya.
The high default rates lead to an individual getting a poor credit score. A poor or low credit score indicates to lenders that you are a high-risk borrower and they may not be willing to lend you money. In addition, you may have to pay a higher interest rate, which increases your monthly payment.
Patascore, a financial education tool, and highly accurate, consistent and robust credit scoring platform, exists to enable such consumers to take stock of their current financial position, comprehend the impact of credit facilities on their credit score and cash flows as well as understand areas where they could improve on.
Patascore which tracks an individual credit history from more than 150 different digital lending platforms as well as from friends and creates the most realistic picture of an individual’s credit appetite and behaviour.
Because there’s a huge gap that exists between microfinance institutions and the millions of unbanked populations in Africa, Patascore targets the unbanked who are considered “Highly Risk Borrowers” as they do not have existing credit history records and have little or lack financial literacy equal to the banked populations, leading them to default on loans.
For an individual to receive their credit score, this proprietary tool assesses their financial risk through an array of attributes which includes a set of unique personality questions and their financial behaviour by analyzing an individual mobile money history. This robust assessment of risk enables the user to estimate their current risk levels as well as comprehend the effect of additional credit on their cash flows and credit scores.
How it Works!
- You can access the service through SMS where you’ll be charged Kshs 15 but getting the credit score and report is FREE.
- Alternatively, you can also access the service for FREE at Patascore.com/register and follow the simple instructions.
Patascore is the only credit scoring platform in the region that allows an individual to willingly offer their financial information in order get their credit score status unlike other platforms that rely on banks, social media data and other lenders to submit names of individuals with any Non-Performing Loans to for blacklisting.
For many lenders (currently tracking credit uptake from over 150 such digital lenders), the endless borrowing cycle possess the greatest risk to the business, and with the many challenges with the current credit information sharing platforms, this risk will soon reach unsustainable levels as most of the targeted consumers start being weighed down by debt.
The overall principal objective of Patascore is to stimulate individual self-examination about personal spending and credit consumption with the aim of aiding financial wealth creation up to the formal financial ladder of life to then reach long-term aspirations and goals.
Start your journey on financial knowledge today and register with Patascore.com/register.