Lending a data hand

In lending, the data and tools for writing loans are as important as having capital to give out. For years, this mismatch between the tools of the trade and the available capital has been a contentious problem for Kenyan lenders, resulting in poor assessments and piles of bad loans.

The ripple effects are now playing out between banks and the Central Bank of Kenya (CBK), with the regulator cutting benchmark rates while banks hesitate to follow suit.

On August 26, the CBK approved ValiData, a due diligence tool built by the country's Credit Information Sharing Association. ValiData acts as a filter inside each bank, checking loan files against industry rules.

State of play: The tool checks that mandatory fields are filled, formats are correct, IDs are valid, and there are no duplicates or obvious errors. Each batch of records is scored, and if fewer than 80% pass, the system blocks the submission and sends it back to the bank to fix before anything goes to the credit bureaus.

Between the lines: When credit bureaus receive quality data, banks get a clearer view of risk, which helps them cut bad loans, price credit fairly, and lend more confidently. Kenyan banks say ValiData delivers on this promise, calling it a move that strengthens the country’s entire credit market.

Zoom out: More than a decade in the making, the project began as a central hub before evolving into secure in-house software for banks. Backed by the Bill & Melinda Gates Foundation through FSD Kenya, it’s now rolling out nationwide.

If you’re Nigerian, you know the drill: one government office wants your National Identification Number (NIN), the next wants the same NIN plus your Bank Verification Number (BVN). Walk into yet another establishment, and now it’s your NIN, BVN, and Driver’s License that is being requested. Same data, different desks. Nigeria is finally saying, “Enough is enough.”

By the end of 2025, the government will roll out the Nigerian Data Exchange (NGDX). This central platform enables government agencies to pull verified data directly, eliminating the need for resubmission.

How will it work? Authorised Ministries, Departments, and Agencies (MDAs) will be able to log in to a unified backend to access citizens’ data. This platform will also allow private companies like fintechs and startups to tap into anonymised datasets for new users’ KYC verification and to provide healthtech, agri-tech, and edu-tech solutions.

For years, Nigerians have been asking why multiple registrations exist despite the existence of NIN, BVN, and SIM linkage efforts. NGDX is the government’s response to that query.

On the flip side: centralising that much sensitive data raises the stakes. The first quarter of 2025 saw 119,000 data breaches recorded in Nigeria alone. In June 2024, a report revealed that unauthorised websites were providing access to sensitive data of Nigerians for as low as $0.065.

If NGDX is going to hold Nigeria’s most important citizen data, it must be strong enough to actually keep it safe.

In more banking news from Kenya, the Central Bank’s rate cuts are showing up in bank earnings. After slashing the base rate from 13% in February 2024 to 9.5% this August, banks have seen their interest income shrink. Half-year results from Absa, Equity, Standard Chartered, Family Bank, and DTB all reveal thinner returns from lending.

Between the lines: Absa’s loan income dropped by nearly KES5 billion ($39 million) year-on-year (YoY) to KES22.4 billion ($174 million), while Standard Chartered saw a 10.4% decline during the same period. Equity Bank managed to lift net interest income by slashing deposit costs, and KCB bucked the trend with loan income growth.

Catch up: Lower rates were supposed to stimulate borrowing, but weaker household incomes meant many customers held back. Banks leaned more on government securities, but as yields fell there too, institutions like Equity and Family Bank are now pledging to rotate cash back into private-sector loans.

Zoom out: Yet the squeeze shows how rate policy filters into bank strategy. As government paper becomes less attractive, lenders face pressure to take on more private credit risk. This could be good news for businesses and households starved of affordable loans—provided banks can keep a lid on bad debt.

It’s no wonder Kenyan banks are backing a tool like ValiData. A more decisive way to lend effectively, cut risk, and grow private loan books is the next frontier for gains. The Central Bank is showing no sign of stopping rate cuts, and with yields on government securities falling (averaging 8% returns), the way forward is to repair lending.

In South Africa, your money is now insured against card fraud (if you meet the conditions).

South Africans just got a new weapon against online fraud with Standard Bank’s newly launched virtual credit card. The bank says it’s so confident in its security upgrades that it is promising a 100% refund if your virtual card is ever used fraudulently.

That’s the headline, but how does the card protect you? The card is created on the banking app. It is loaded with security features, including a dynamic card verification value (CVV) that changes every time you initiate a transaction and screening tools that tell users what merchants have saved their card details.

Before you celebrate, this money-back guarantee comes with a few conditions. You’ll only get a refund if you didn’t authorise the transaction, if you reported it within two days, or if the transaction wasn’t from a trusted device. If your phone with the virtual card gets stolen and is used in a transaction, you will most likely not receive a refund.

Why it matters: South Africa’s Financial Ombud Scheme recorded a 73% year-on-year increase in digital banking fraud complaints between January and May 2025. Standard Bank’s new virtual card is promising insurance and reassurance. 

The refund promise is a bold move, but a refund doesn’t stop scammers from trying. It just means the bank, not you, will carry the loss. But with Standard Bank’s confidence in their product, it’s clear they’re not too worried about fraud happening.