The Credit Gap in the Pacific
Access to credit is the next frontier of Pacific financial inclusion. Mobile money has solved, or is well on the way to solving, the transaction account problem in many Pacific markets. But credit — the ability to borrow at reasonable cost for a business investment, a medical emergency, or a housing improvement — remains almost entirely absent from the formal financial system for most Pacific residents. The reason is straightforward. Banks and microfinance institutions lend based on credit history. Pacific residents who have only recently entered the formal financial system have no credit history. The vicious circle is complete: you cannot get credit because you have no credit history, and you have no credit history because you have never been able to access credit. This circle is not unbreakable. It has been broken in other markets — in East Africa, in South and Southeast Asia — by using alternative data sources to assess creditworthiness in the absence of traditional credit files.
What Transaction Data Can Tell Us
A mobile money platform like M-PAiSA, which has been operating in Fiji since 2010, holds fifteen years of transaction data for hundreds of thousands of users. This data contains signals that are at least as predictive of creditworthiness as traditional credit data, and in some respects more so. Income regularity. A user who receives consistent inflows demonstrates income stability directly relevant to credit assessment. Payment behaviour. Users who consistently pay utility bills through the platform, top up mobile credit on schedule, and maintain a positive balance demonstrate the financial discipline that lenders care about. Network effects. The people and businesses a wallet holder transacts with regularly tell a story about their economic embeddedness in their community. Recovery patterns. How a user's balance responds to negative shocks reveals resilience not captured in any static credit file.
The Technical Challenge
Building an alternative credit scoring model on mobile money transaction data is technically achievable. The data science is well understood; similar models have been built in Kenya, India, and elsewhere. What makes the Pacific context specific is the adaptation of those models to Pacific economic patterns. Pacific income is more seasonal than most alternative credit models are designed for. A Fijian sugarcane farmer has a very different transaction pattern from a salaried worker in Suva, and both are very different from a seasonal worker in Australia who sends remittances home during the Australian agricultural season. A credit scoring model that does not account for these patterns will systematically under-score creditworthy borrowers. Data quality is also a genuine challenge. Transaction data needs to be cleaned, deduplicated, and normalised before it can be used for scoring. Building the data infrastructure required is a significant investment — but one that pays returns across multiple product categories once it is in place.
Regulatory Considerations
Credit is more heavily regulated than payments in most Pacific jurisdictions — as it should be. Consumer protection requirements, responsible lending obligations, and interest rate regulations all apply. Any alternative credit scoring model built on Pacific mobile money data needs to be developed in close consultation with the relevant central bank and consumer protection authority. The Reserve Bank of Fiji, in my experience, is a thoughtful and engaged regulator willing to consider innovative approaches to credit provision, provided they are accompanied by robust consumer protection frameworks. The key requirements are transparency — borrowers should understand how their creditworthiness is being assessed — and fairness, ensuring the model does not systematically discriminate against protected groups. Australia's Consumer Data Right framework, which gives individuals control over their financial data and allows them to share it with accredited providers, is a model that Pacific regulators are watching closely.
The Opportunity for Australia
For Australian FinTech companies, Pacific alternative credit scoring represents a genuine commercial opportunity — and one aligned with Australia's development interests in the region. An Australian FinTech that could build a credit scoring model on Pacific mobile money data — in partnership with Pacific telcos, Pacific central banks, and Pacific development finance institutions — would be creating a product with no direct competitor in the region. The addressable market is significant: millions of Pacific residents with demonstrated financial capacity and no access to formal credit. The skills required — alternative data modelling, credit risk management, regulatory engagement, consumer protection design — are well represented in Australia's FinTech sector. What is required is the Pacific market knowledge and the local partnerships to apply those skills effectively. That is precisely the kind of collaboration that Australia's Pacific engagement strategy should be actively facilitating.