Post by World Economic Forum

Nearly nine in ten workers in sub-Saharan Africa earn their livelihoods in the informal economy. Around 500 million people across three continents participate in community savings groups with repayment rates above 95%. Yet the MSME finance gap in emerging markets stands at $5.7 trillion. Forty percent of small businesses are credit-constrained - not for lack of discipline, but because formal lenders cannot read it. A pilot in Uganda, run by CARE International with Ensibuuko and gnuGrid CRB, digitizes savings group transaction data into a credit-scoring algorithm. The result: non-performing loan rates below 2%, far lower than typical first-time formal borrowing. Savings groups in CARE's network generated almost $1.4 billion in member savings last year. The capital already exists. The question is whether formal finance connects to it. Find out more from Vidhya Sriram, Maria L. and Eric Kaduru: https://lnkd.in/d2695_5r