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Kenya’s LipaLater to deploy ML, open banking to secure market share

Kenyan Fintech firm LipaLater has carved its niche in East Africa’s pay-later marketplace, supported by over 500 retailers.

The company is leveraging growth within Africa’s digital credit market, including the roll out of mobile base micro-loans. It has helped over 100,000 customers acquire goods within its credit model, in Kenya, Nigeria, Rwanda and Uganda.

LipaLater customers get an approved credit limit which they can use in purchasing goods from partner stores. They then make monthly payments to clear their debt.

With the massive growth that beckons, LipaLater plans to apply machine learning and data analytics to improve customer experience and reduce default rates.

“Machine learning is not something new but we are testing it out. One key aspect of the business is credit scoring customers which helps to check if the customer can afford to repay the loan,” Njunge Njenga, Technical Lead at LipaLater told ITWeb Africa.

“We do have a machine learning model that predicts the probability of somebody defaulting based on certain data points. We look at transaction history, CRB reports and many other variables.”

Njenga added that their ML models are being successfully piloted in Kenya, with the ongoing task to secure massive sets of data that strengthen these models.

“Acquiring data is a challenge in Kenya cause of regulation, data privacy policies and internal data policies. Institutions like banks are not willing to give you that information,” said Njenga.

Njunge Njenga, Technical Lead at LipaLater.
Njunge Njenga, Technical Lead at LipaLater.

The value proposition for LipaLater in Nigeria is that it reinforces the concept of open banking, which is lacking in East Africa.

According to Njenga access to data could help mobile money lenders raise their businesses to the next level and ensure a seamless user experience.

“Through the customer's consent companies can access critical data such as customer’s balance, banking history, insight of income and spending patterns that would improve the model,” he explained.

He said that the recent opening of the Twitter Africa office in Ghana and Facebook’s presence in Nigeria is evidence of a market that is fast maturing.

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