It found that banks using scoring were more likely to lend to the Small and Medium Enterprises that lacked sufficient financial information for approval through traditional underwriting methods. Presumably, this is due to the inclusion of the business owner’s personal information in the scoring process.
I believe that this is an area with great potential, yet the uncertainties are large and the payoff horizon is unknown. Banks and supervisors need to recognize that it is acceptable - and even expected - to make some investments that do not pay off.