EFL and MasterCard Partner to Drive MSME Growth Globally
Entrepreneurial Finance Lab (EFL) and MasterCard (NYSE:MA) announced a global partnership to promote financial inclusion and Micro, Small and Medium Enterprises (MSMEs) growth in emerging economies. Launched at a ceremony during the SIBOS Conference in Dubai, the partnership will help scale EFL’s psychometric credit scoring technology across MasterCard’s emerging market footprint, equipping financial institutions with new tools to improve credit underwriting for SMEs.
In emerging markets across the globe, high potential SMEs are locked out of the financial system because they lack traditional credit information like credit bureau scores, formal financial records, proof of income or identity, and collateral. Without these credit criteria, SMEs are unable to prove their creditworthiness to financial institutions, and the engines of economic growth are left without credit to expand.
The Entrepreneurial Finance Lab is an innovative financial technology company which employs psychometric and non-traditional applicant data to measure credit risk in markets where traditional credit information is scarce. By quantifying key characteristics of entrepreneurship like business skills, intellect, attitudes and beliefs, and ethics and honesty, EFL enables financial institutions in emerging markets to lend to previously unbankable clients.
“Since our inception out of Harvard University in 2010, EFL has enabled more than $200 million in new loans to unbanked small businesses in emerging markets,” said D.J. DiDonna, co-founder and Chief Operating Officer of EFL. “Across 26 languages in over 20 countries, EFL’s psychometric risk scoring provides new, crucial information which enables banks to lower restrictive lending hurdles for SMEs. EFL partner banks have observed increased lending and profitability along with the new customer-base of under banked, many of whom enjoy their first risk-product relationship with a formal financial institution.” EFL and MasterCard will kick-off the partnership with Banco BHD of the Dominican Republic, where EFL’s credit scoring technology will be used to issue credit cards and term loans to SMEs. Similar collaboration is underway with leading financial institutions across Asia, Africa, and Latin America. “With EFL’s innovative credit scoring tool, even the smallest business will be able to join a payments network,” said Ed Glassman, Group Executive, Global Commercial Products and Solutions.
MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter@MasterCardNews, join the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau.
The Entrepreneurial Finance Lab (EFL) is an innovative financial technology company which employs psychometric and nontraditional applicant data to create credit scores to measure risk and potential among new and existing small businesses. After beginning with research at the Harvard Center for International Development, EFL now works with leading financial institutions across Africa, Asia, and Latin America, and has been recognized by the G-20 as one of the most innovative approaches to SME finance globally. Find EFL at www.EFLglobal.com or connect @EFinlab to help EFL give credit where credit’s due.