Inclusive Credit Assessment

Michael Turner PERC

For roughly 3.5 million people around the world, the rules for obtaining credit are a financial Catch 22. To go through accepted banking channels, they need a credit history. And it’s not easy building a credit history if you don’t have access to credit in the first place.

But Ashoka Fellow, Michael Turner, saw another way. To him, regular bill payments seemed like they should be enough to prove financial stability and credit worthiness. Steady crop revenues, too. And on-time rental payments. All kinds of alternative data that was being ignored by credit agencies. So he set out to prove to the formal financial sector that this information was enough to show that the unbanked – those unable to acquire a bank account – were not necessarily high risk.

Through the Politician and Economic Research Council (PERC), Turner launched the Alternative Data Initiative, a global advocacy campaign promoting alternative information as valid data for mainstream credit. By changing how regulators and financial institutions assess risk, he has created new incentives for those institutions to lend to the previously unbanked. Thanks to his reimagining of risk perception, millions of people now have access to the global credit market, enabling them to more affordably build the lives they wish to lead. And the global credit market, by combining this alternative data with more traditional sources, now has a more precise way to assess consumer risk profiles.