The role of credit reporting in supporting financial inclusion and responsible finance, recently discussed at the latest industry world conference

Starting from recent highlights reported in IFC and World Bank analyses, Lodi focused his attention on the hottest industry topics on a worldwide level: financial inclusion and responsible finance. Both these topics are cross-cultural and relevant in developed as well as in developing markets.
Despite the significant efforts made during the last decade, financial inclusion is still globally weak, Lodi argued, with half of all working-age adults unbanked, and 77% of the poor population. Also taking data on micro, small and medium enterprises into consideration, financial inclusion is still an open issue, with 50-60% of MSMEs in emerging markets classed as unserved or underserved. Responsible Finance - defined by the IFC as the ‘dynamic process for scaling-up inclusive finance which complements risk management, balances financial with social returns and contributes to long term commercial sustainability essential to wider economic growth and job creation’ - needs to be improved, and the credit reporting industry has already played and will play an important role in filling the current gap, Lodi added.
Credit bureaus, especially private bureaus, have been successful in widening the pool of data in many countries, i.e. obtaining data from alternative and non-traditional sources such as retailers and utilities or data from microfinance institutions. As a result of these efforts, during the last 7 years the coverage of adults within private credit bureaus has increased both in developed and developing countries.