CARMA, a credit data marketplace operating in Kenya and Nigeria has rolled in Zambia to tackle the gap in markets underserved by credit bureaus.
Carma aims to provide lending companies with access to real-time credit data on a peer-to-peer basis through a pay-as-you-go service as a majority of markets in Africa lack advanced credit reporting systems to serve the unbanked population. CARMA has designed a proprietary solution to comply with the demand of unbanked countries in circulating data.
CARMA has signed an agreement with NASCU Zambia to provide credit reference services for 1,122 credit unions. The credit unions serve almost 1.5 million credit union members equivalent to almost 15 percent of Zambia’s adult population.
According to William Kanyika, Managing Director at National Association of Savings and Credit Unions for Zambia: “We are happy to find a critical missing component for the lending infrastructure with CARMA. It fully covers the needs of credit unions in sharing credit data amongst themselves, which is now even more important than ever before due to the economic impact caused by the COVID-19 pandemic. Over indebtedness control and fraud prevention are expected benefits for lenders and we believe that many other financial and non-financial institutions will leverage the impact of the credit data marketplace along with us.”
It is estimated that only 11 percent of adults in Africa have credit history records with bureaus, this puts lending companies at the risk of facing higher default rates. One of the key problems lenders in Africa experience is the unavailability of data.
The outbreak of COVID-19 has caused a majority of lending companies to stop granting new loans due to the uncertainty of over indebtedness aggravated by job losses and pay-cuts.
Ted Martynov, Co-founder and CEO CARMA, said: “The number of people enjoying access to formal financial services in Africa is increasing by an unprecedented number, however, there is still a huge gap in accessing credit information and the growth rate for collection of credit data history is still growing at a very slow pace. At CARMA, we have reinvented a solution for mobile money based economies by creating an inclusive environment for the pan-industry by providing real-time data that will help lenders fuel their scorecards and provide a unique method to monetize data for any enterprise. CARMA is available across Africa as data is provided from one peer to another and we do not store any customer information in our servers.”
CARMA is making credit data available for lending organizations by providing a number of services such as sharing raw credit data on a decentralized peer-to-peer basis, contribution rewards to be paid for data contributors, is a pay-as-you-go-service, i.e. per use with no subscription costs and data delivery is available via WIN10 App or API both of which do not require formidable IT integration.