Credit Reporting at the Base of the Pyramid

This report examines the state of credit reporting at the base of the pyramid (BoP). It draws on data and analysis from International Finance Corporation (IFC) and CGAP market intelligence on credit reporting systems. It provides information on the diversity of players in the microlending market and their evolving demand for credit information.The report examines lessons learned for effective credit reporting at the BoP and identifies key success factors as well as common challenges. It concludes with recommendations for policy makers, microlenders, and donors. The report states that policy makers should:

• Provide support, encouragement and urgency to existing initiatives to develop or enhance credit information sharing among microcredit providers;
• Mandate microcredit provider participation in information sharing where viable credit reporting mechanisms exist at the market level;
• Establish a conducive regulatory environment for credit information sharing at the BoP lender level;
• Assess regulatory requirements that add to the cost of obtaining credit reports on BoP borrowers;
• Play a role in developing awareness of credit reporting among the low-income population.