The two firms – both participants of the Nesta’s Open Up Challenge – have established a joint initiative to boost the level of information available about private companies and tear down barriers in business lending decisions.
As part of the collaboration, Credit Data Research is exploring incorporating credit data designed specifically for the banking industry, with DueDil’s database of private company information. Using banking-proof credit data, compared with alternative credit reports in the market, means that businesses are more fairly represented – meaning lenders can make more informed lending decisions.
Commenting, Damian Kimmelman, co-founder and CEO at DueDil, said, “Growth businesses are simply not getting the access to finance they need to expand. This is due to information friction. There simply is not enough information about private companies for lenders to properly price risk and truly understand their business.
“Together, we hope to remove this friction by increasing the level of information there is on each company. An open information economy can bring together businesses and lenders, safeguarding the spirit of entrepreneurs and giving them the break they need to prosper.
Access to finance is consistently highlighted as a serious concern for small to medium businesses (SMEs), which is worrying considering they are the lifeblood of our economy. Their contribution to the British economy is set to exceed £241bn by 2025, up 19 per cent from last year’s figure of £202bn according to research from the Hampshire Trust Bank and the Centre for Economics and Business Research.
Commenting, Alessio Balduini, founder CEO of Credit Data Research, added, “Small and medium sized businesses are at an instant disadvantage. Large companies, especially those that are listed, have a wealth of publicly accessible information, making it easier for lenders to make a decision. Yet for smaller businesses, the absence of information means it is difficult to gain access to the same level of finance.
“We are excited to work with DueDil to provide a service to the SME segment that is badly needed. Open Banking and our Credit Passport are already facilitating transparency by connecting banks, structured finance transactions and SMEs. Our collaboration will enhance access to finance for small businesses and bring them one step closer to creating a fair playing field for business lending.”