Making Small Business Lending Profitable

This report presents proceedings of the Global Conference on Credit Scoring that took place in Washington D.C. in April 2001. The conference brought together international financial sector expertise to exchange perspectives on addressing policy challenges and private sector solutions in micro and small business finance.

The conference reaffirmed that expanding credit to underserved communities and businesses around the world can promote development, while also providing profitable business opportunities for financial institutions. Modern technology, growth of credit bureaus and the advent of credit scoring help lenders better evaluate risk. Conclusions from the conference include:

• Better information is key to managing risk and overcoming obstacles to small business lending;
• Credit information has to be consistent, good, and timely;
• Necessary infrastructure consists of legal and regulatory framework that allows information flow and arrangements within and between financial institutions;
• Credit scoring comes makes it possible to move from making decisions to managing decisions on credit.

The conference highlighted the value of credit information and provided participants with a sense of how this information might be transformed into tools to improve the decision-making process, risk management and access to credit.