The Bangladesh Telecom Regulatory Commission (BTRC) plans to introduce a new license category for alternative credit scoring, a process that assesses an individual’s creditworthiness using non-traditional data sources. The initiative is aimed at enabling the assessment of creditworthiness for individuals who are underrepresented in the formal financial system. BTRC’s move was initiated when Pioneer People Limited (PPL), a telecommunications value-added service (TVAS) provider, applied for a license renewal. PPL had received a license for alternative credit scoring in 2018 but had not fully commenced operations.
Alternative credit scoring involves evaluating credit risk through machine learning and data derived from various digital platforms and applications, including mobile banking usage, geolocation, bill payment history, and social media activity. BTRC opted not to renew the TVAS license for PPL but decided to establish a new license category specifically for this service.
This approach aims to address the credit needs of the unbanked population and individuals who lack traditional credit histories. Alternative credit scoring utilizes non-traditional data sources to assess creditworthiness, potentially providing financial opportunities to those previously excluded from the formal credit system.
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