In emerging markets, roughly two-thirds of the 
       population remain unbanked and underserved
                                               The bottom of the pyramid 
                                                 remains underserved:
                                                  • Banking sector penetration of 5% to 
                              Large                 25% vs. 70% to 90% in developed 
                              companies             markets
                   34% of     and top retail 
               Population     clients             • Banks tend to focus on large 
               Banked                               commercial
                                                    clients and top retail clients
                                               Targeting the underserved:
              66% of Population                   • Microfinance (up-scaling): 
                                        Retail,     Total reach: 70 million clients globally
                  Unbanked              micro 
                                        and       • Banks (down-scaling): 
                                        small       Requires retail skills and systems
                                        business
                                        es
                                                  • Non-bank financial institutions 
                                                    (diversifying):
                                                    Leasing, factoring, housing, insurance
                                          2
      Role of Credit Reporting in financial 
                                    markets
      • Broader and fairer access to credit: 
           Decrease information asymmetries between borrowers and lenders; 
            expand access to credit and lower the costs of credit for good 
            borrowers
      • Better performing loans: 
           Allow lenders to accurately evaluate risks and improve portfolio 
            quality
      • Prevent over-indebtedness:
           Allow lenders to assess an applicant’s total indebtedness and thereby 
            calculate a borrowers capacity to service debt  (with ‘positive data’)
      • Improve profitability: 
           Support introduction of credit scoring and automated underwriting; 
            lower lenders’ operational costs in retail & SME lending, improve their 
            margins, capital adequacy, and provisioning requirements 
      • Stability in the financial sector:
           Positive economy wide effects
                                                                             3
              Establishing the Legal and Regulatory 
                                  Environment
                                                Caribbean Credit Bureau Project:
                                                  • 5 year program funded by the 
                                                    Canadian International Development 
                                                    Agency (CIDA) 
                                                  • Engaged in The Bahamas, Barbados, 
                                                    Belize, Guyana, Haiti, Jamaica, OECS, 
                                                    Suriname, and Trinidad and Tobago
                                                General Principles of Credit 
                                                 Reporting:
                                                  • Joint project by the World Bank and 
                                                    Bank of International Settlements 
                                                    (BIS)
                                                  • Need for Global Standards: What is 
                                                    international best practice? How can 
                                                    we balance the needs of the market 
                                                    with the rights of consumers? What 
                                                    are the roles of the various players? 
                                                    What can policy makers do to 
                                                    improve the flow of information but 
                                                    maintain control?
                                            4
             Consumer vs. Commercial Credit 
                                    Bureaus
       •Consumer credit bureaus             •Commercial credit bureaus report 
        collect data on individuals and      on companies that are smaller in 
        small businesses, and in some        size and earnings than those 
        cases on larger companies.           corporations covered by rating 
       •Consumer credit bureaus              agencies.
        collect information in a            •Commercial credit bureaus 
        standardized format from several     provide information on companies 
        types of lenders, such as:           available through :
       •banks                               •public sources 
       •credit card companies,              •direct investigations
       •retail lenders,                     •payment behavior reported by 
       •other non-bank financial             suppliers. 
        institutions,
       •utility company
       •MFI Lenders
                                            5
         Contributors of data to Private Credit Bureaus
                                                                            • Over 50% of emerging market 
                                                                               bureaus reportedly receive 
                                                                               information from MFIs
         100% 94%                                                           • Just over a quarter of these 
                                                     86%                       bureaus receive information on 
                                                              82%              individuals in MFI lending groups
          80%              75%                                              • Data quality remains an issue 
                                            68%
      g e                                                                      with respect to data provided by 
        c                                                                      MFIs
      n r
      i u 60%                       57%
      v o                                                             52%
      i s                                                                     51%                       52%
      e  
      c h                                                                              44%                      44%
      e c
      r
        a 40%
      s e
      u  
      a m                                                                                      23%
      e o
      r r
      u f
          20%
      b  
        n
      t
      i o
      d i
      e t
      r a
      c m   0%
        r
      f            Private PublicDe  velopment      FinanceCredit CardFirms Retailers Utilities CrediMt icrofinancePublic
      o o                                   Credit 
        f                                                    Issuers providing       ProvidersBureausInstitutionAsgencies
        n          Comm. CommB.anks         Unions/ Corp.
      % i                                                           loans/Trade                                  courts)
                   Banks    Banks           Coops
                                                                     Creditors
  Source: Doing Business 2012
                                                               6