Title: Can a mobile credit-scoring model provide better accessibility to South African citizens requiring micro-lending?

Authors: Matthew Kenneth Hendricks; Adheesh Budree

Addresses: University of Cape Town, Rondebosch, Cape Town, 7700, South Africa ' University of Cape Town, Rondebosch, Cape Town, 7700, South Africa

Abstract: This paper investigates developing a conceptual model for credit scoring microfinance in South Africa. This poses an issue as the demand for micro-lending arise primarily from the lowest income groups who are normally found in rural or peri-urban areas and are not easily accessible. Current literature and research on credit scoring models within microfinance for low-income groups was found to be extremely limited. Based on current research, this paper assessed the use of collateral and collateral substitutes, innovative methods behind credit scoring and mobile technology which could drive a credit scoring model to provide access to underprivileged citizens. Based on the findings of this study, a best practice conceptual model that develops a form of credit scorecard based on an applicant's social media credit score, psychometric score, mobile credit score and the presence of collateral and collateral substitutes that can help increase accessibility of microfinance to underprivileged recipients was developed.

Keywords: microfinance; micro-lending; credit scoring; screening; ICT4D; mobile.

DOI: 10.1504/IJEF.2019.099001

International Journal of Electronic Finance, 2019 Vol.9 No.3, pp.157 - 169

Received: 11 Mar 2017
Accepted: 26 Apr 2018
Published online: 12 Apr 2019 *

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