Cracking the Credit Code: Alternative Data and AI for Financial Inclusion

Download: Full Report | Executive Summary

Cracking the Credit Code: Alternative Data and AI for Financial Inclusion explores how new data sources and artificial intelligence are transforming credit scoring and expanding access to finance for underserved borrowers in emerging markets. Traditional credit systems often exclude individuals and small businesses without formal financial histories, leaving many women entrepreneurs and low-income borrowers invisible to lenders. By incorporating alternative data—from mobile money transactions and digital payments to business and platform records—new scoring models can better capture economic activity that previously went unrecognized.

The report examines how fintech firms, lenders, and technology providers are deploying these models in practice, drawing on global market analysis, firm case studies, borrower-level data, and interviews with industry practitioners. Evidence from emerging markets suggests that these approaches are already helping expand access to finance for individuals and small businesses who were previously outside the reach of formal credit. In many contexts, women borrowers perform as well as or better than men when assessed using alternative data-driven models, highlighting the potential for these innovations to help narrow persistent gender gaps in credit access.

Expanding access to finance is central to the World Bank Group’s Gender Strategy, which aims to provide 80 million more women and women-led businesses with access to capital by 2030—recognizing that expanding inclusive financing is critical to unlocking women’s entrepreneurship, economic participation, and job creation at scale.

Realizing this potential of innovations like Alternative Credit and AI to expand access to finance—and scaling these solutions responsibly—will require thoughtful implementation, improved data governance, and continued collaboration across the financial ecosystem. The report highlights emerging practices and opportunities for financial institutions, technology providers, investors, and policymakers seeking to expand access to credit while ensuring that new credit systems remain transparent, inclusive, and trustworthy.

Related Links 

• Banking on Women
• Event: From Invisible to Investable: Innovations That Lift Women Entrepreneurs
• Report: Her Fintech Edge
• Blog: How Digitization Is Disrupting Collateral-Based Lending
• Report: The Use of Alternative Data in Credit Risk Assessment: Opportunities, Risks, and Challenges
• Blog: Is the proliferation of alternative data making credit bureaus extinct?