In Nairobi, a street vendor named Grace has never held a bank account. She has no credit history, no payslips, no collateral. By traditional standards, she’s invisible to the financial system. Yet last month, she received a micro loan—approved in under three minutes, based entirely on how she uses her phone.
This is the quiet revolution reshaping credit in emerging market
The Problem with Traditional Credit
Traditional credit bureaus rely on banking history, formal employment records, and documented loan repayments. That works well in developed economie, but it excludes the majority of people in Africa, Latin America, and South Asia.
According to the World Bank’s Global Findex Database, over 1.4 billion adults globally remain unbanked. Many more are ‘credit invisible’ people with steady income and reliable payment behaviour who simply don’t fit the conventional model.
The result? A massive gap between financial need and financial access. And into that gap, a new approach has emerged.
What Is Alternative Credit Scoring?
Alternative credit scoring assesses risk using behavioural and transactional data instead of formal banking records. The data sources are surprisingly rich:
- Mobile usage patterns; call frequency, SMS activity, airtime top-ups, data consumption
- Payment behaviour; regularity of bill payments, mobile money transactions, digital wallet activity
- Device analytics; smartphone model, app usage, device stability
- Behavioural signals; geolocation consistency, network stability, even the number of contacts saved
With user consent, some providers analyse hundreds of micro-data points from a single smartphone. Fed into the right AI models, this information creates a dynamic, real-time credit profile, one that’s far more inclusive than traditional scoring methods.
Telcos Leading the Charge
Telecommunications companies have become unexpected champions of financial inclusion. They already have the data, the customer relationships, and the infrastructure to deliver credit at scale.
Kenya’s Safaricom offers a compelling example. Through M-Shwari and Fuliza, customers access credit directly from their mobile wallets, with approvals based entirely on usage patterns and repayment history. Similar initiatives by MTN and Airtel across sub-Saharan Africa have enabled millions to borrow, save, and pay digitally often for the first time in their lives.
The model works. Default rates remain low, financial participation is growing, and the proof of concept is clear: alternative data can predict risk just as effectively as traditional metrics, while reaching people those metrics never could.
What Comes Next
Alternative credit scoring is evolving fast. The next wave will integrate with broader digital ecosystems, Buy Now Pay Later (BNPL) platforms, microinsurance, embedded finance, and digital banking. As data sources grow richer and more connected, credit assessments will become increasingly accurate and accessible.
Regulation will need to keep pace. Data privacy and consumer protection must remain central as these models scale. But the direction is unmistakable: alternative credit scoring isn’t an experiment anymore. It’s becoming the foundation of financial inclusion in emerging markets.
Bringing It All Together
For businesses looking to offer financing in these markets, the challenge is clear: how do you tap into alternative scoring without building the infrastructure from scratch?
That’s where we come in. At Upya, our 100% digital onboarding connects businesses directly to specialised alternative scoring providers through seamless API integrations. It means you can offer secure, compliant credit assessments without the complexity, reaching more customers, responsibly.
Because we believe technology should enable inclusion, not limit it.