A more open, consumer-friendly data environment should benefit consumer welfare, competition and providers’ risk management strategies.

Many lenders do not have sufficiently deep or comprehensive data to offer customized products that go beyond small-value loans for personal consumption (e.g., business loans to microentrepreneurs based on wholesale purchase or merchant payments activity data). Lenders may have access to very different sources of data and customer information, such as mobile phone records, social media or financial statements. Their data are either not shared across lenders or, if shared, are unreliable. Even within formal data-sharing channels like credit bureaus, data are often incomplete, outdated or even inaccurate. This limits digital credit providers’ ability to segment borrowers and offer more products that are tailored to them.

This report examines credit history inaccuracies reported by customers in Kenya and offers solutions for updating digital credit reporting.