Johannesburg, 05 March 2019 - Experian South Africa today launched its ground-breaking, innovative smartphone app, GeleZAR. South African slang for ‘learning about money’, it aims to bring more micro, small and medium sized enterprises (MSME) into the mainstream economy.
MSMEs are the ‘unseen sector’ of the South African economy and the challenges facing these businesses are evident, according to a 2018 report by the World Bank Group’s International Finance Corporation (IFC). The IFC report estimates that the total size of South Africa’s MSME market, including formal and informal enterprises, is 5.78 million of which only 14% is formalised. The MSME sector only grew in population by 15% between 2008 and 2017 according to the World Bank report, which is a reflection of the low survival rate, and almost stagnant growth rate of these entrepreneurs within this sector. According to the study, this can be attributed to the difficulties experienced when attempting to access finance, because 75 percent of MSME credit applications are rejected with only two percent able to access bank loans.
“GeleZAR has been developed to help such entrepreneurs gain basic business and financial education skills and also so that they can more easily access personalised financial products at interest rates that work for them,” says Simon Rudman, Social Innovation Lead at Experian SA.
“From a credit bureau perspective, there are millions of ‘thin file’ people and MSMEs in sub-Saharan Africa. These are people with limited information on a traditional credit bureau or have no information at all and find themselves excluded from mainstream finance. They often face more difficulty – or higher costs - when applying for financial products or services,” explains Rudman. “We believe that introducing new and more appropriate data sources is the key. There are many forms of alternative data that could help build a financial footprint and positively impact the lives of many.”
Sub-Saharan Africa is projected to have 500 million smartphone subscribers by 2020 . Experian saw this as a significant opportunity to make the most of this technology by integrating financial educational content through an interactive gamification experience to help consumers on their credit journey as they manage their finances, budget and credit score in a fun and easily relatable way. The GeleZAR app was developed by Experian in partnership with local South African consumer and fintech developer Flat Rock Solutions. It is a mobile phone app designed to provide financial education and credit scoring to micro-entrepreneurs and individuals to ensure that they get the credit score they deserve. The app also advises individuals on how to maintain good credit health and recommends remedial actions, such as seeking a debt counsellor, if the need arises.
With their permission, micro-entrepreneurs will be able to build an alternative credit score using hundreds of mobile data points through the GeleZAR app, to determine creditworthiness.
“Only data that an individual has consented to share will be used to assess an individual’s stability and credit score,” explains Rudman. “The greatest benefit for individuals is that of financial inclusion, whereby people will get access to financial products while banks and lenders will begin to see these individuals in a new way to offer the credit and interest rates they deserve.”
To test the technology and user reception, Experian and Flat Rock are working with one of the largest low-cost mobile phone retailers in Africa to trial the app which has been pre-installed on a range of its entry-level smartphones. Should the experiment prove to be successful, the intention is to extend the rollout and make the app accessible for free on more than six million devices annually.
“A core focus for Experian is to place consumers at the heart of our business. With the South African market being a vital hub for Experian’s ambitions for the region, we are working on reaching people who are considered to be invisible in the credit world through GeleZAR’s digital and financial literacy experience that seeks to change lives and connect economies. GeleZAR is a great example of how Experian is innovating to find new ways to empower our customers while uplifting societies. It also fulfils our passion for financial inclusion and the accurate assessment of affordability. Through our pioneering work we hope to build and improve the credit files of millions of people in South Africa and beyond,” ends Rudman.
Experian South Africa
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About Experian Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime. We have 16,500 people operating across 39 countries and every day we’re investing in new technologies, talented people and innovation to help all our clients maximise every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.
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