Experian UK has taken significant steps to help SMEs benefit from the access to finance measures announced by the Government. Under government plans, enhanced credit information held by nine designated banks will be shared equally with finance providers that agree to share their own credit data. This will make it easier for challenger banks and alternative finance providers to assess the creditworthiness of potential business customers.
Experian has formally received designated Credit Reference Agency (CRA) status, allowing it to work with all the designated banks and add SMEs’ current account data to its large credit database.
Experian’s Max Firth said:“We are enthusiastic advocates of the changes brought about by these new credit data sharing regulations. Receiving more credit data on SMEs will be a source of high quality predictive data for the credit market, and help to fulfil the Government’s goal of increasing competition between financial providers. Most of the designated banks have been voluntarily sharing data with Experian for some time, and we’re now working to deliver these enhanced benefits to the wider finance provider community and SMEs as soon as possible.”
Under the regulations SMEs will need to be notified by their banks that their data will be shared. SMEs will need to give permission at the point of applying for finance for their data to be used in this way. SMEs will also have the right to access and challenge the information which is shared about their business.
Most of the designated banks already voluntarily share credit data with Experian on some level. A number of them have supplied data for Experian to test so SMEs can begin benefiting from the increased data sharing as soon as possible. SMEs and alternative finance providers can already benefit from credit data sharing, but Experian expects to be able to share enhanced data, in line with the new scheme, later this year.
The Government announcement on SME Credit Information sharing can be found here.
BIIA had covered the event in a previous posting. To view this posting click here.
Source: Experian UK