A third important source of liquidity – resulting from the excess savings of emerging-market economies and those with large commodity reserves – has also found its way to the United States in pursuit of high risk-adjusted returns. We must judge the extent to which each of these three liquidity drivers are structural or cyclical, more persistent or more temporary.
If banks consider lending to SMEs to be a viable business proposition and show the willingness and determination to expand credit coverage to this sector, then credit scoring models can be employed effectively to achieve this objective in a meaningful way.