Half of South Africa’s economically active population remains invisible to traditional banks
Half of South Africa’s economically active population remains invisible to traditional banks, with millions unable to access credit simply because they lack formal credit histories.
This is according to Eshmael Mpabanga, Regional Head for Southern Africa and Senior Vice President at financial technology firm Intellect Design Arena, who says artificial intelligence could help banks assess these customers using alternative data such as mobile payments, utility bills and spending patterns.
"The reality is that approximately 50% of the country’s economically active population is effectively "invisible" to traditional lending models," he said.
"These are individuals and entrepreneurs who are active, earning, and transacting, but because they lack a "thick" credit file of historical formal data, legacy systems can see only a blank space – even if they are looking".
