Where Credit Scores Are Scarce, Mobile Devices Fill In The Gaps For SME Lenders
Financial regulations forced banks to pull back from small business lending in the wake of the financial crisis as pressure to reduce risk exposure increased. Risk mitigation is also behind massive regulations like KYC and anti-money laundering rules. So while SMEs have faced a tough journey finding a bank loan across the globe — and that includes major economies like the U.S. and Europe — small businesses and entrepreneurs in emerging markets find they’re being shut out of the bank lending market altogether.
Alternative lending company Kountable recently spoke with PYMNTS to explain its approach to this problem. According to Chris Hale, Kountable’s founder and CEO, the strategy requires an understanding of the business customer, tapping into the potential of the mobile device and leveraging alternative data.