Publication: Facilitating SME Financing through Improved Credit Reporting
Date
2014-05
ISSN
Published
2014-05
Author(s)
International Committee on Credit Reporting
Abstract
The general principles for credit
reporting were issued by the World Bank in September 2011.
Since then, the World Bank and the international committee
on credit reporting (ICCR) have been leading efforts towards
the implementation of the general principles worldwide. This
report is one of the concrete outputs of the work following
the general principles. It addresses one of the most
significant problems that limit the ability of most small
and medium enterprises (SMEs) around the world to obtain
adequate external financing to underpin their productive
activities: information asymmetries. Creditors assess the
creditworthiness of credit and loan applicants based on two
basic criteria: ones financial capacity or ability to repay
a loan, and ones willingness to repay the loan. A credit
reporting system s (CRS) basic objective is to address
information asymmetries, which is crucial for determining
repayment capacity and repayment willingness. Credit
reporting can therefore be extremely valuable to creditors
for enhanced, fact-based credit risk assessments, and in
this sense can also be seen as a tool to facilitate access
to financing, including by SMEs. The main objective of this
report is therefore to identify actions that can be
undertaken by authorities and other relevant policy makers
to improve the flow of data and other relevant credit
information on SMEs to creditors through CRS. For this
purpose, the report first analyses the overall status of
credit reporting activities in connection with SMEs.
Citation
“International Committee on Credit Reporting. 2014. Facilitating SME Financing through Improved Credit Reporting. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/21810 License: CC BY 3.0 IGO.”