Credit-scoring app maker is able to lend eligible smartphone users up to a month of mobile service.

Juvo explained this week how the strong uptake of its credit-scoring app means it is effectively turning prepaid mobile customers into postpaid mobile customers.

Juvo takes the form of a smartphone app that is rolled out in concert with operators. It profiles the customer based on their behaviour and interactions with the app, and assigns them what it calls an ‘identity score’. This functions similarly to a credit score, so it can be used as the basis for lending the customer small amounts of voice, data and SMS credit.

The longer that Juvo is used for, the more detailed the picture of the customer becomes, until – provided they are repaying their loans on time – they become eligible for larger allowances of airtime on credit, and eventually a broader range of financial and other services, such as loans, insurance, utilities and so on.

"We’re taking prepaid callers and moving them up to full postpaid, effectively," because in some cases Juvo is offering the customer a full month of mobile services on credit, explained Steve Polsky, CEO of Juvo, to Total Telecom at Mobile World Congress on Wednesday.

"We want to loan more than we ever thought. We want to go upstream to offer more and more services," he said.

Having said that, Polsky made clear that Juvo is careful not to loan airtime to customers who can’t or won’t pay off their debts.

Like a credit score, the identity score helps to predict the likelihood of a customer paying back their loan. "It’s about giving everyone the right amount of credit," he said.

So far, three operators have incorporated Juvo’s technology into their smartphone-based top-up apps. Cable & Wireless Communications (CWC) is rolling it out across its footprint in the Caribbean and Latin America, while Millicom’s Tigo operations in Guatemala, Colombia, Paraguay, El Salvador, Bolivia, and Honduras also use it. Polsky said a third, "yet-to-be announced", player in Europe has also started using Juvo.

According to data provided by those aforementioned telcos to Juvo, they have recorded on average a 10%-15% increase in ARPU and a 50% reduction in churn since they rolled it out. Since CWC launched Juvo, Polsky said the telco has seen a 50% increase in the number of times customers top up.

"We had modelled that we would reach 1% of the carriers’ smartphone users per month. So, month one we start with nothing, and by month 33 we’re up to one third," he explained.

But the reality is considerably different.

"We’re reaching a third of smartphone users in under 12 months," Polsky said.

Juvo at the moment is focused on large prepay markets found in Southeast Asia, Eastern Europe, Latin America including the Caribbean, but not yet Africa.

Polsky said there are opportunities for Juvo to go into Africa, but only when the company is larger.

"We’re 40-something people," he said. "We want to grow as fast as we can without over-extending ourselves," he said.