Alternative credit scoring and financial inclusion : a structural data justice perspective

Abstract

This paper explores questions of justice surrounding the use of alternative credit scoring techniques for promoting financial inclusion in emerging economies. It adopts a structural data justice framework to move beyond mainstream political analyses of datafication and understand the structural determinants of how data systems behind phenomena like alternative credit scoring are designed. The analysis focuses on three structural components of alternative credit scoring processes, namely the institutional framework, relational dynamics, and epistemic issues. By applying a structural data justice critique to alternative credit scoring, the paper offers new insights into where injustice may lie within the use of this technology for development. It finds the relative opacity of the institutional actors that wield these technologies, the power imbalance that underlies the scoring process, and the epistemic constraints on consumers' ability to contest the truthfulness of their credit score to constitute forms of injustice. This study underscores the importance of addressing the structural elements behind datafication processes for an evaluation of their justness.