Credit bureaus in Egypt: A closer look at I-Score - Decisimo

Published on: 2024-08-10 18:35:26

In Egypt, the credit bureau market is led by a single entity known as I-Score, or The Egyptian Credit Bureau. I-Score holds a central place in the credit system. It maintains credit data for individuals and small and medium-sized enterprises, or SMEs.

Establishment and Legal Framework

I-Score was established on August 3, 2005, after approval from the Capital Market Authority and the Central Bank of Egypt. It was set up under Companies Law No. 159 of 1981 and Capital Market Law No. 95 of 1992.

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Scope and Range of Data

I-Score maintains a credit information database that covers both SMEs and consumers. The database gives the lending community a clear signal. It supports credit approvals and improves trust in decision logic.

Members and Subscribers

Based on the latest available data, I-Score had 913 banks, companies, and microfinance institutions subscribed to its services. That subscriber base shows its role in the Egyptian credit market.

The Unbanked Population

However, a large share of Egypt's population remains unbanked. Reports suggest that more than 50 million individuals were unbanked out of an estimated total population of around 110 million in 2021. That represents at least 67% of the Egyptian adult population.

A main reason cited for being unbanked is insufficient income. Almost 45% of unbanked individuals say they do not have enough money to hold a bank account.

Impact on the Credit Market

By providing broad coverage of credit data for individuals and SMEs, I-Score has supported financial inclusion and economic growth in Egypt. It has also helped ensure that the lending community has access to reliable credit information. That matters for assessing creditworthiness, managing credit risk, and supporting responsible lending practices.

Implications and Challenges

The high share of the unbanked population creates challenges for credit bureaus like I-Score. A large segment of the population lacks formal financial records. That makes it hard for them to be part of the formal credit system, and they are not represented in I-Score's database.

Alternative Data for Financial Inclusion

One way to address this challenge is the use of alternative data. Credit bureaus and financial institutions can use non-traditional data sources such as mobile phone usage, utility bill payments, and other forms of informal financial activity. That can help assess the creditworthiness of individuals without a formal banking history. It can also support greater financial inclusion and give the unbanked population better access to credit and other financial services.

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