The future of lending in Africa won’t be built on spreadsheets — it will be built on data.
For years, millions of Africa’s small and medium-sized enterprises (SMEs) have been locked out of affordable credit. Not because they’re high-risk — but because they’re invisible to traditional banking systems.
Yet today, a quiet revolution is underway. Thanks to technology, we can finally measure creditworthiness using alternative data — real, everyday digital footprints that tell a more complete story of how a business operates and manages money.
Here are 7 alternative data sources that are changing how lenders and insurers evaluate SME risk across Africa.
Mobile Money Transactions
Mobile money is the heartbeat of Africa’s financial system.
The transaction history — deposits, withdrawals, peer-to-peer transfers, merchant payments — paints a detailed picture of an SME’s cash flow.
Insight: A consistent inflow and outflow pattern can serve as a strong proxy for income stability and repayment capacity.
Utility Bill Payments
How regularly a business pays electricity, water, or internet bills says a lot about its reliability.
Insight: Timely payments signal financial discipline — a key trait of trustworthy borrowers.
E-commerce and POS Data
With the rise of digital marketplaces and point-of-sale (POS) systems, SMEs now generate trackable sales data every day.
Insight: Platforms like Jumia, MarketForce, and mobile POS networks can show revenue trends and customer retention patterns — offering lenders a real-time view of business performance.
Supplier and Distributor Files
A business’s supply chain relationships are a goldmine for credit insight.
Supplier invoices, delivery timelines, and payment records reveal not only operational scale but also credibility within the ecosystem.
Insight: Businesses that pay their suppliers consistently — and get repeat orders — are strong candidates for trade credit.
Psychometric and Behavioral Data
Beyond numbers, technology can now measure entrepreneurial mindset.
Simple digital questionnaires evaluate traits like honesty, risk tolerance, and goal orientation.
Insight: When combined with transaction data, psychometric scoring helps lenders assess intent — not just ability — to repay.
Social and Online Reputation Data
Digital footprints extend beyond financial data.
Social media activity, online reviews, and digital identity verification can enhance KYC processes.
Insight: Patterns of professional engagement, verified business profiles, and consistent brand presence often correlate with legitimate operations.
Geolocation and Mobility Patterns
For asset-heavy SMEs like logistics or agri-supply chains, location data matters.
Tracking delivery routes, warehouse visits, or field activity can validate a company’s existence and operational scale.
Insight: Stable geographic activity = stable business operations.
Why This Matters
According to the Alliance for Financial Inclusion (AFI), over 65 million SMEs in Africa are underbanked or unbanked.
Alternative data can help bridge that gap — making lending more inclusive, accurate, and scalable.
But with great data comes great responsibility.
Privacy, consent, and ethical use are non-negotiable. Insurers and lenders must adhere to data protection laws like Kenya’s Data Protection Act (2019) and emerging AfCFTA digital trade protocols.
The Role of Credit Insurance in the Data Revolution
At Underwriting Africa, we’re partnering with financial institutions, fintechs, and reinsurers to turn data into opportunity.
Our credit insurance solutions allow lenders to safely extend credit to SMEs who are creditworthy but lack traditional collateral.
By combining alternative data insights with risk protection tools, we help de-risk lending portfolios and fuel real economic growth.
Want to pilot an alternative data-based credit insurance solution?
Let’s build it together.
📩 Contact us at [email protected]
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