cat/credit-and-financial-information
On June 29, 2017, the Kyrgyz Republic’s Credit Information Bureau “Ishenim” and Iceland-based CreditInfo Solutions commemorated the beginning of a strategic and technical partnership in a landmark shareholder agreement signing ceremony.
The global unbanked and underbanked market continues to grow exponentially each year, and will reach an estimated three billion individuals and over 250 micro, small and medium-sized enterprises (MSMEs) in the next several years. This segment of the banking industry has the potential to reach over $150bn of new revenue and steal up to 10% of existing banking profits. Both new and traditional banking entities continue to seek opportunities to provide competitive solutions to this underserved corner of the market.
The European Investment Bank (EIB) and Banco Sabadell will provide EUR 800m to Spanish SMEs with the aim of supporting their investments and promoting the development of new projects, particularly in the services and industrial sectors. The EIB will grant a EUR 400m loan to Banco Sabadell, to which the Spanish bank will add an additional EUR 400m of its own.
The agricultural credit outreach in Pakistan has increased to 3.27 million farmers at end June 2017 from 2.40 million farmers last year. The State Bank of Pakistan explored new financing products, value chain financing, warehouse receipts financing, digitalisation of credit, execution of credit guarantee scheme for small and marginalised farmers, and inclusion of microfinance institutions/rural support programs for catering the credit needs of marginalised farmers.
The global unbanked and underbanked market continues to grow exponentially each year, and will reach an estimated three billion individuals and over 250 micro, small and medium-sized enterprises (MSMEs) over the coming decade. This segment of the banking industry has the potential to reach over $150bn, and both new and traditional banking entities continue to seek opportunities to provide competitive solutions to this underserved corner of the market.
Microfinance was deemed the solution to the financial constraints faced by poor households and entrepreneurs in developing countries. However, recent evidence suggests that providing small loans through microfinance institutions (MFIs) hasn’t quite lived up to the hype. Despite its resounding success bringing large numbers of individuals into the formal financial sector, traditional microcredit has failed at delivering credit to poor people in a way that is convenient, affordable and sustainable.
An exclusive opportunity for members, the SME Finance Forum’s study visits are an integral part of our peer learning opportunities. Whether members are looking to expand their SME lending, in the nascent stage of their SME lending, or just thinking about starting SME lending, the study visits offer the opportunity to learn best practices from highly respected peers.
Business activity in China’s SME sector weakened for the third straight month in June to hit the lowest in 16 months, a Standard Chartered survey tracking more than 600 Chinese SMEs found. Unemployment has increased and SME firms are expected to become unprofitable this year.
It has become difficult for smaller businesses lacking strong collateral to find financial at viable interest rates. Experts say banks are reluctant to extend credit to SMEs, rather they prefer to lend to bigger companies. Beijing is feeling the crunch the hardest, as four-fifths of its work force is SMEs.
European SMEs have gained additional support in easier and more transparent domestic and cross-border trade. The Digital Trade Chain Consortium, which is made up of seven European banks, has selected IMB to partner with them in building a new blockchain-based trade finance for small- and medium-sized enterprises. Developed on the Linux Foundations’ Hyperledger Fabric blockchain, the platform with run on the IMB Cloud.
In a previous analysis, we laid out the machine learning process we conducted for Destacame.cl, an investee of the Catalyst Fund, which provides alternative credit scoring to underbanked consumers in Latin America. For a firm like Destacame.cl, the investment in predictive algorithms for credit scoring is a no-brainer. It is an inherent part of their digital product and data-driven business model, and can be seamlessly incorporated. But what about for a brick-and-mortar financial institution that is just beginning to explore digital or more sophisticated technology applications?
