Brenda used to sell curtains door to door in Nairobi, Kenya, but she dreamed of opening her own storefront. She had a college education, but no credit history and little chance of winning approval for a bank loan to start her business. What she did have was a mobile phone.

It turns out that the thousands of different interactions that Brenda, or anyone in Nairobi, has with her mobile phone can paint a picture of how likely she is to repay a loan. What time of day does she make most of her calls? If she places fewer than 30% of her calls between 9 PM and midnight, the odds that she will repay a small loan increase by 18%. What apps does she have? If she has more than 23 social media applications, she is 20% less likely to repay a loan. But if she has fewer than 10, her repayment rate increases.

The World Bank Global Findex Database reports that two billion adults do not have a bank account, let alone a FICO or other score rating their creditworthiness.

A raft of alternative credit-scoring startups are ready to help them. Tala, a data-science startup headquartered in Santa Monica, Calif., uses more than 10,000 data points to construct financial identities for people who have no traditional credit history.

Read the full article on financial inclusion by Rob Goodier at ImpactAlpha