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Accuracy and timeliness of information held by the business information industry has been impacted by various direct and indirect actions taken by public bodies in response to the COVID-19 pandemic. Moratoriums on loan repayments, closure of courts and banks due to lockdowns, increased lending to businesses under government-backed scheme, changes in insolvency regimes are among the measures that have disrupted the flow of data within the credit information ecosystem. However, there are alternative solutions, which could enable SME lenders to access timely and accurate information about their clients and continue lending.

On November 12th, 2020 executives at the Business Information Industry Association (BIIA), a trade association for providers of a wide range of business information services; Rubix Data Sciences Private Limited, an Indian start-up providing predictive analytics; Experian, a global information services company providing data and analytical tools; and Global Legal Entity Identifier Foundation (GLEIF), a non-profit managing a network of partners to provide data for unique legal entity identification worldwide; had a lively discussion of the possible impact that the COVID -19 pandemic has on the business information eco-system and subsequent credit risk decisions.

About COVID-19 Roundtable Series

In times of crisis, accurate and timely information is key. Sharing knowledge and practical experience are proven forms of investment that pave the path to success. With the purpose of helping our members build their own knowledge advantage, the SME Finance Forum facilitates activities and learning opportunities with the strategic approach of collecting and disseminating the best practices, while connecting SME finance experts and practitioners within our global network. Starting in late March, the Forum hosts weekly virtual roundtable sessions focusing on mitigation efforts used to cope with COVID-19, sharing those experiences in a continuous and real-time basis. Learn more>

Key discussion points

  • What impact do government COVID-19 mitigation measures have on quality of business information?
  • What alternative solutions are available to SME lenders to access timely and accurate information about their clients?
  • What are the main lessons learned from the COVID-19 pandemic for the future crisis management?

Major take-away:  According to the famous proverb “Imperfect Information Makes Imperfect Markets”, the discussion centered around the issue of reliability, accuracy and timeliness, which has been put into question by moratoriums and government interventions.  The situation will exist until these disruptive interventions have ended.  Until the situation ends, the credit information industry will be challenged to find alternative data and methods to overcome the shortfalls in public sector information and moratoriums on insolvencies.  For example, cash flow-based data has become a critical early warning indicator concerning potential insolvencies.  The credit information industry is bracing itself for a huge backlog in insolvencies once the “insolvency bubble” has burst.

To learn more about this discussion, please listen to this important session:

BIIA thanks the SME Finance Forum for arranging the event.  We also thank our members Rubix Data Sciences Private Limited, Experian, and our friends from the Global Legal Entity Identifier Foundation (GLEIF), for their valuable contribution.