Ntwiga, Davis BundiOgutu, CarolyneKirumbu, Michael Kiura2019-09-172019-09-172018-04-10Ntwiga, D., Ogutu, C. and Kirumbu, M. (2018). Inclusion of peer group and individual low-income earners in M-Shwari micro-credit lending: a hidden Markov model approach. International Journal of Electronic Finance, 9(2): 121-133https://repository.daystar.ac.ke/handle/123456789/2974The M-Shwari micro-credit lending system has excluded the low income earners as they lack good financial options due to volatile and fluctuating income. This paper proposes a decision support system for credit scoring and lending of the low income earners who are customers of M-Shwari using the hidden Markov model. The model emits the credit scores of the customers, both for the peer groups and the individual customers. The learning and training of the model utilises the customers' socio-demographics, telecommunication characteristics and account activities. The peer groups have higher credit scores and are more attractive to offer credit facilities using M-Shwari when compared to the individual borrowers.enPeer groupLow-income earnersM-ShwariHidden Markov modelArticle