TransUnion Kenya and FICO are revolutionizing Kenya’s financial landscape with advanced risk solutions designed to expand credit access and empower financial institutions. By utilizing enriched data and analytics, lenders can make more informed decisions, promoting economic empowerment and a more resilient financial ecosystem.
At the core of this transformation are two key solutions: TransUnion’s CreditVision® Variables and the FICO® Score. These tools address critical risk assessment and financial inclusion challenges. CreditVision Variables analyzes over 145 data sources and up to 24 months of payment history. They offer a comprehensive view of consumer financial behavior. The new FICO Score, built specifically for Kenya. Leverages predictive analytics and data from over 4 million records in TransUnion’s database.
By integrating these solutions, lenders can improve risk predictability, enhance credit approval rates, and extend financial services to more consumers. In global markets, CreditVision Variables has boosted risk predictability by 20%-30%, leading to a 15%-20% increase in approval rates.
CreditVision Variables helps lenders by:
- Identifying and engaging new customers efficiently
- Optimizing the profitability of existing customers
- Providing insights into customer motivations and behaviors
“These innovations will have a profound impact,” said Morris Maina, CEO of TransUnion Kenya. “Consumers, Small and Medium Enterprises (SMMEs), and businesses will benefit from greater access to credit and financial services, fostering economic growth and stability.”
TransUnion has partnered with FICO across Africa since 1997 and is now expanding this collaboration in Kenya. The new FICO Score enhances credit assessment, particularly for microlending, where 95% of scoreable consumers have at least one microlending tradeline. This single credit score improves lenders’ ability to assess risk and manage portfolios effectively.
Benefits of the FICO Score include:
- A unified credit score for traditional and digital lending, including mobile loans
- Faster credit decisions, reducing application friction
- Improved credit limit allocation and loan structuring
- Consistent risk-based pricing
- Enhanced risk management, enabling lenders to expand credit access responsibly
The FICO Score, ranging from 300 to 850, provides a clear measure of credit risk, along with key factors influencing the score. This transparency helps both lenders and consumers make better financial decisions.
“The FICO Score offers clear insights into credit risk, allowing lenders to tailor credit terms while expanding financial inclusion,” said Mike Manaton, Vice President of Scores at FICO. Data shows that consumers in the highest-risk decile [300-442] present nearly nine times the risk of those in the lowest-risk decile [682-850].
According to TransUnion’s Q2 2024 Consumer Pulse Study, financial inclusion in Kenya is improving, with 36% of consumers reporting sufficient credit access, up from 33% a year ago. Additionally, 60% of consumers are considering new or refinanced credit applications within the next year.
“This innovation aligns with Kenya’s Financial Inclusion agenda,” said John Gachora, Chairman of the Kenya Bankers Association [KBA]. “Embracing these technologies ensures broader financial access, supporting sustainable development and prosperity.”
Industry leaders, including Jared Getenga, CEO of CIS Kenya, recognize these solutions as transformative, enabling businesses to make data-driven decisions that drive economic growth.
