How EFL and FINCA Drive Financial Inclusion Through Credit Scoring

credit scoring

How can the poor access loans when they don’t have a credit history or credit score? Last year, FINCA partnered with Entrepreneurial Finance Lab (EFL), an innovative credit scoring company, to improve lending in Guatemala using alternative credit scoring.

Almost 60% of Guatemalans are financially excluded and do not have an account at a formal financial institution. In addition, without credit scores, most of this population cannot access loans to grow their businesses and increase their incomes.

FINCA helps over 30,000 Guatemalans to access small loans, insurance and other financial products to improve their lives. With the help of EFL’s alternative credit scoring system, FINCA will be able to reach thousands more in the country with needed and critical small business loans.

“It doesn’t require that you have two years of history of mobile phone data,” says Bailey Klinger, Co-founder and Executive Chairman of EFL. “We are able to assess the creditworthiness of the three billion people in the world who lack credit bureau data.”