Published by Jessica Weisman-Pitts
Posted on September 7, 2022
5 min readLast updated: February 4, 2026
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A written Q&A with Burak Kilicoglu, Director of Global Markets at Creditinfo
Over 2 billion people globally have limited or no access to financial services and a vast proportion of these people are living or working in emerging markets. Without access to financial services, their spending power is significantly reduced and their lack of participation in the economy has a negative impact on the overall health of the financial ecosystem. Equally, on a professional level, if they can’t obtain business loans, new businesses can’t be set up and existing ones are limited in their growth plans, so there are less job opportunities and the whole economic system inevitably suffers the consequences.
In less economically developed areas, having access to financial services is crucial not only to the growth and maturation of the overall financial ecosystem and promotion of financial inclusion but reducing poverty and inequality and improving overall quality of life.
They are only set up to review data from ‘traditional’ data sources – like utility bills or loan payment information from banks– when considering applicants. However, if people don’t have bank accounts that usually means they have little to no credit history to their name. It’s a real catch-22 where these people need a credit history to successfully access credit.
Even though globalisation connected developed and emerging economies, beyond the short-term turbulence that comes with a recession, people living and working in emerging markets will most likely feel relatively lesser impact. For those on very low incomes, small value lending will continue to grow. For example, mobile lending and the digitalisation of these markets from a cash economy to a digital economy won’t be significantly impacted so people will still be able to access small loans if they need to.
Moreover, the digitalisation of these markets will mean people have a digital footprint, so they will have access to credit and this information can be used to grow their credit score. Regardless of a recession, this kind of small value lending usually remains unscathed and continues to grow because the digitalisation and transformation process is much stronger than a short-term economic trend.
The issue is those with no credit history will remain at an economic disadvantage during a recession. As financial institutions look to reduce their risk profile and inevitably tighten their purse-strings, it will become harder than ever for this group to access credit.
It’s about looking beyond ‘traditional’ data to alternative data. Rather than relying solely on ‘traditional’ data to assess an individual’s creditworthiness and level of risk, there is an abundance of existing data on potential new customers that banks and financial institutions can tap into to come to robust lending decisions and in doing so expand the availability of their financial services.
For example, data around people’s payments for mobile phone plans, other fintech apps, and even social media use, can be used to develop market level credit risk scores to offer businesses and individuals who don’t have bank accounts.
Banks and financial institutions are aware that this information exists, but they often lack the resources and proficiency to collect and understand the data. To overcome this obstacle, they need to invest in the right tools to analyse and interpret the data so they can make informed lending decisions and extend financial services to individuals and businesses in emerging markets.
In Pakistan, the traditional system of granting housing loans hasn’t been performing in the way it should be to support people looking to buy a house, as well as grow the amount of capital circulating in the economy and help it mature. There is a huge disparity between the number of housing loans that have been granted and the number of people living in Pakistan. Although 10 million Pakistani citizens have access to formal credit, around 105 million people among the adult population do not. Banks and financial institutions have had access to minimal formal credit data to help inform their decision making and as a result they have not been able to grant more loans.
To help individuals in Pakistan obtain housing loans, a government-backed initiative led by the Pakistan Banks’ Association (PBA) has been set up. The initiative combines traditional data sources like internal banking data and credit bureau data with alternative data sources – such as mobile metadata – to increase the number of potential applicants for housing loans.
The PBA has partnered with Creditinfo Group to close the gap between the relevant organisations and ensure they have access to the right data. As the first project of its kind in Pakistan, it has equipped financial services with the relevant data and tools to grant loans to more people, especially those in low-income segments that had previously not been considered for traditional housing finance.
Financial inclusion refers to the accessibility of financial services to all individuals and businesses, particularly those in underserved or low-income communities, enabling them to participate in the economy.
Credit risk management is the process of identifying, assessing, and mitigating the risk of loss due to a borrower's failure to repay a loan or meet contractual obligations.
Alternative data refers to non-traditional data sources, such as social media activity or mobile payment history, used to assess creditworthiness and make lending decisions.
Emerging markets are economies that are in the process of rapid growth and industrialization, often characterized by lower income levels and developing financial markets.
A credit bureau is an organization that collects and maintains consumer credit information, providing credit reports and scores to lenders to help assess credit risk.
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