S&P Capital IQ launches Enhanced SME Scorecard to Measure Credit Risk for Women-led SMEs in Emerging Markets
Credit Assessment Scorecard Developed to help Women Small Business Owners in Capital Markets
New York, NY – September 21, 2015 -- With an eye on helping to close the lending gap for small, women-owned businesses in emerging markets, S&P Capital IQ, a leader in financial data, research and analytics, today announced the launch of an SME (Small and Medium Enterprises) Scorecard, designed to provide a consistent and transparent lending framework for financial institutions that removes biases, specifically gender, and thus helps to level the playing field for women-owned small businesses.
Recognizing the enormous credit gap experienced by small women-owned businesses in emerging markets – judged by the industry to be as large as $287 billion and affect as many as 70% of women-owned SMEs who are unserved or underserved by financial institutions – S&P Capital IQ sought to develop a scorecard where the essential key risk factors were identified and applied unilaterally to all borrowers. Among them are country risk, industry risk, competitiveness, management and financial risk. The enhanced SME Scorecard enables lenders, particularly commercial and development banks, to better address underserved populations by providing loans with acceptable and sustainable levels of credit risk, while also ensuring these loans will have a positive social impact.
“The advantages for closing the lending gap for small women-owned business in emerging markets are pretty clear,” said Bob Durante, Senior Director, S&P Capital IQ. “It would fuel economic growth, boost labor force participation, drive up per capita income and strengthen GDP growth. That’s why we have developed our SME scorecard, to help credit lending institutions identify and rank order the default risk of loans to SMEs.”
2015 has been declared the “year of the woman,” marking the 20th anniversary of the Beijing Platform for Action, which produced what has been called the most progressive blueprint ever for advancing women’s rights. And this month, it will be a major point of conversation at the UN General Assembly. For S&P Capital IQ and many of its clients, empowering women in business, especially in emerging markets, has become an extremely relevant issue to focus on.
S&P Capital IQ’s SME Scorecard specifically identifies a borrower’s key risk factors and weighs those factors against financial benchmarks broken out by industry and region. This process is grounded in a developmental data set that includes over 10,000 SMEs. In turn, the risk drivers, weights and benchmarks provide a consistent roadmap for both SME lenders and borrowers, no matter what bias – gender or otherwise.
Results from S&P Capital IQ’s performance testing of the SME Scorecard, including both benchmarking to the rated universe and backtesting to historical defaults, will be fully documented in an upcoming whitepaper available upon request.
For more information on the new S&P Capital IQ SME Scorecard, watch Bob Durante’s video on this important topic, read his blog post, or contact him directly at 212-438-7995 or at firstname.lastname@example.org.
S&P Capital IQ Communications