Credit Scoring and Credit Risk

Tencent credit ratings will be available to check directly through QQ and WeChat, according to reports. While Tencent has been using its scoring in its lending businesses, it has not before made the scores available to WeChat and QQ Pay users. Their data sources for scoring are different than Ant and Alibaba in China.

Ireland SMEs in manufacturing and the wholesale and retail sectors are experiencing strong growth with new lending in Q1 2017 reaching €3.6bn. However, the rejection rate on bank finance applications has increased from 11pc to 13pc over the year to March 2017, with rates for medium-sized firms continuing to drop but small and micro firms experiencing increases. This info is according to Independent.ie.

SME Finance Forum member Intesa Sanpaolo, has partnered with SME lender iwoca to provide clients with credit products that will help SMEs obtain financing. The partnership coincides with an investment in iwoca by Neva Finventures, Intesa Sanpaolo’s fintech venture capital arm.

Maurizio Montagnese, chief innovation officer at Intesa Sanpaolo, says that the “industrial synergies” between the firms “could be significant in the coming years” and allow it “to enter segments of the market not served by other banks."

SME Finance Forum member, SIDBI, has created a program to address the challenges the MSME sector faces regarding credit. The Certified Credit Counsellor program for the MSMEs is a response to the findings of the 4th MSME census that revealed only 7 percent of SMEs can avail financing from organizations. This provides an opportunity for the growth in the sector by focusing on ways in which the credit related issues could be resolved.

With support from FSD Africa, Women’s World Banking partnered with Malawi’s NBS Bank to design and implement a credit program for SMEs with a focus on women-owned businesses. The three institutions provided a guide to assist financial providers looking to serve women-owned SMEs with sustainable loans. A few of the topics covered include how to fully integrate SME credit into bank priorities, build staff capacity and prioritize leadership development.

Recently, three economists—Oded Netzer and Alain Lemaire, both of Columbia, and Michal Herzenstein of the University of Delaware—looked for ways to predict the likelihood of whether a borrower would pay back a loan. The scholars used data from Prosper, a peer-to-peer lending site. Potential borrowers write a brief description of why they need a loan and why they are likely to make good on it, and potential lenders decide whether to provide them the money. Overall, about 13 percent of borrowers defaulted on their loan.

The according of a BB_(ZA) rating to Retail Capital, which provides working capital to businesses, will open up opportunities for increased funding to small business and job creation in the sector.

This is the first rating for Retail Capital, which was founded in 2011. “Being a rated Financial Institution allows us to access new pools of capital at more cost effective rates, which will benefit the SME businesses that we finance and also allow us to expand the offering across South Africa,” says Retail Capital CEO Karl Westvig.

This Report argues for reaching beyond increasing access to credit. Countries within Europe and Central Asia (ECA) must build integrated financial systems, enabling prudent inclusion in a region significantly lagging in the use of saving products. Striking the right balance across all dimensions of financial development (stability, efficiency, inclusion, and overall depth) is crucial for achieving and sustaining inclusive growth.