Tetsushi Sonobe: This paper examines to what extent digital credit scoring enables the poor to access services that they otherwise cannot access. Compared with traditional credit scoring, digital credit scoring is used in diverse commercial scenarios including renting and leasing related to shopping, transportation, and housing. While traditional credit scoring evaluates users’ “capacity to comply” based on income, wealth, and other financial data, digital credit scoring focuses users’ “willingness to comply” based on alternative data, such as academic records, non-financial payment streams, and social media footprints. The use of non-financial data allows the unbanked population to access digital credit. The willingness to comply is strengthened by digital credit platforms’ provision of convenient services for credited users based on their digital credit scores, especially the reduction or exemption of deposit, which is otherwise required in renting in various scenarios, such as bicycle, automobile, and house rental.
The literature on digital credit...