Arraiz, IraniRuiz Ortega, ClaudiaStucchi, RodolfoBruhn, Miriam2017-12-152017-12-152017-12https://hdl.handle.net/10986/29012This study collaborated with the Entrepreneurial Finance Lab and a large bank in Peru to use psychometrics for small and medium-size enterprise lending. Applicants used a psychometric tool and those who achieved a score higher than a threshold were offered a loan. Using a regression discontinuity design and credit bureau data, the study finds that the tool increased small and medium-size enterprise loan use by up to 59 percentage points for applicants without a credit history, without leading to worse repayment behavior. This increase in borrowing resulted primarily from financial institutions other than the partner bank. For applicants with a credit history, the tool did not increase small and medium-size enterprise loan use.CC BY 3.0 IGOASYMMETRIC INFORMATIONPSYCHOMETRICSCREDIT RISKACCESS TO FINANCESMALL AND MEDIUM ENTERPRISESSMEsMICROFINANCEWorking PaperWorld Bank10.1596/1813-9450-8276