Personal Democracy Plus Our premium content network. LEARN MORE You are not logged in. LOG IN NOW >

Can Data About Mobile User Behavior Build a Credit Score?

BY Julia Wetherell | Wednesday, January 30 2013

Cignifi generates credit scores from data collected on mobile users.

In some emerging economies, consumers seeking to take out a loan or sign up for a credit card can face a significant hassle: not having the credit history to prove monetary responsibility. Now several organizations are aiming to help potential borrowers by looking a non-traditional line of credit into consideration: mobile phone use.

Evgeny Morozov at Slate has an overview of several initiatives that are using social media and mobile data to formulate a kind of proxy credit score. In BRIC countries and other emerging economies, where cell phone use is often more widespread than the Internet, mobile is the prevailing force. Cambridge-based start-up Cignifi has built modeling software that can purportedly make a judgment call on whether a loan applicant is a worthy prospect for a lender by analyzing at patterns of mobile activity — such as timely payments and the hours and duration of phone calls. The program, which was tested with 3 million mobile subscribers in Brazil last year, comes up with a numeric rating — similar to a US credit score — based on mobile habits.

If adopted for widespread use, this method of credit scoring could open up an untapped wealth of clients to financial services companies. Cignifi hopes to monetize the platform by partnering with providers in various countries — next in Mexico, soon in the other BRIC nations. But mobile companies are already catching up: last year Safaricom, the major provider in Kenya, precluded the need for a mitigating party by looking at its own customer data to evaluate borrowers for its micro-lending and m-banking service M-Shwari.

Using existing data to streamline the credit process could have significant benefits for emerging economies — encouraging investment and aiding small business. Yet Morozov points out the ironic disparity between mobile users trading personal data for loan qualification, and the wealthy stockpiling expensive privacy software the prevent that access:

In yet another puzzling paradox of the modern age, the rich people are spending money on expensive services that protect their privacy and improve their standing in Google's search results, while the poor people have little choice but to surrender their privacy in the name of social mobility.

In a hyper-connected, hyper-shareable world, where personal information is so often voluntarily divulged, it seems important to remember that privacy is still a privilege — one that many may not be able to afford on the path to prosperity.

Personal Democracy Media is grateful to the Omidyar Network for its generous support of techPresident's WeGov section.

Transparency and Public Shaming: Pakistan Tackles Tax Evasion

In Pakistan, where only one in 200 citizens files their income tax return, authorities published a directory of taxpayers' details for the first time. Officials explained the decision as an attempt to shame defaulters into paying up.

GO

wednesday >

Facebook Seeks Approval as Financial Service in Ireland. Is the Developing World Next?

On April 13 the Financial Times reported that Facebook is only weeks away from being approved as a financial service in Ireland. Is this foray into e-money motivated by Facebook's desire to conquer the developing world before other corporate Internet giants do? Maybe.

GO

The Rise and Fall of Iran's “Blogestan”

The robust community of Iranian bloggers—sometimes nicknamed “Blogestan”—has shrunk since its heyday between 2002 – 2010. “Whither Blogestan,” a recent report from the University of Pennsylvania's Iran Media Program sought to find out how and why. The researchers performed a web crawling analysis of Blogestan, survey 165 Persian blog users, and conducted 20 interviews with influential bloggers in the Persian community. They found multiple causes of the decline in blogging, including increased social media use and interference from authorities.

GO

tuesday >

Weekly Readings: What the Govt Wants to Know

A roundup of interesting reads and stories from around the web. GO

Russia to Treat Bloggers Like Mass Media Because "the F*cking Journalists Won't Stop Writing"

The worldwide debate over who is and who isn't a journalist has raged since digital media made it much easier for citizen journalists and other “amateurs” to compete with the big guys. In the United States, journalists are entitled to certain protections under the law, such as the right to confidential sources. As such, many argue that blogging should qualify as journalism because independent writers deserve the same legal protections as corporate employees. In Russia, however, earning a place equal to mass media means additional regulations and obligations, which some say will lead to the repression of free speech.

GO

Politics for People: Demanding Transparent and Ethical Lobbying in the EU

Today the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) launched a campaign called Politics for People that asks candidates for the European Parliament to pledge to stand up to secretive industry lobbyists and to advocate for transparency. The Politics for People website connects voters with information about their MEP candidates and encourages them to reach out on Facebook, Twitter or by email to ask them to sign the pledge.

GO

monday >

Security Agencies Given Full Access to Telecom Data Even Though "All Lebanese Can Not Be Suspects"

In late March, Lebanese government ministers granted security agencies unrestricted access to telecommunications data in spite of some ministers objections that it violates privacy rights. Global Voices reports that the policy violates Lebanon's existing surveillance and privacy law, Law 140, but has gotten little coverage from the country's mainstream media.

GO

More