Scoring for Access: Emerging Evidence on the Impact of Credit Scoring on SME Lending

In developing countries small and medium enterprises (SMEs) are thought to be an important source of innovation and employment because of their flexibility in responding to new market opportunities and their potential for growth. However, entrepreneurs face a number of barriers to expanding their businesses and employing more workers, including constrained access to credit - in 2010 available credit for SMEs in developing counties fell about one trillion dollars short of demand. Why can’t financial institutions in developing countries meet the demand for credit from SMEs?