This empirical white paper assesses the impacts on model predictiveness and credit access of both adopting machine learning techniques and incorporating electronic bank account information (often called cash flow data) in consumer underwriting models.

FinRegLab today released new empirical research demonstrating that adopting machine learning techniques and incorporating cash flow data into credit underwriting can significantly increase predictiveness and expand credit access for consumers—without increasing lenders’ default risk.

A new empirical study from FinRegLab finds that cash-flow data can help lenders underwrite small businesses more accurately, particularly when evaluating early-stage companies and financially constrained entrepreneurs that often struggle to access credit because lenders consider them to be higher risk.

This report details the experiences of mission-based lenders such as community development financial institutions (CDFIs) and minority depository institutions (MDIs) as they adopt electronic bank account data and lending platforms to increase lending to minority-owned businesses and other underserved entrepreneurs. The paper provides both a practical snapshot of how lenders manage data and technology adoption today and a broader analysis of issues that will shape their ability to serve substantially larger numbers of entrepreneurs going forward.

This empirical paper analyzes the impacts on predictive accuracy and credit access of incorporating electronic cash-flow data into small business underwriting models using data from two fintech lenders that lend to a broad spectrum of customers.

The COVID-19 pandemic accelerated the adoption of digital technology in financial services, transforming how consumers and small businesses access credit. Open banking—the secure sharing of customers’ financial data with third parties— offers a promising opportunity to expand credit access for underserved small businesses that have been shut out of traditional financial services due to the risks, costs, and uncertainties of microlending to new and smaller enterprises.

Join us for quality, relevant learning content for professional development with opportunities to connect with peers and industry leaders. We will gather as a diverse group of forward-thinking nonprofit credit professionals, financial wellness practitioners, credit industry stakeholders, policymakers, and researchers. During our time together we will actively participate as leaders and innovators to shape the future of credit.

OFN’s annual Small Business Finance Forum (SBFF) is the premier event for mission-driven small business lenders, partners, and advocates. This event offers an excellent opportunity to learn from peers and build valuable connections, participate in OFN training, learn about products and services for CDFIs serving small businesses, hear remarks from distinguished speakers, and much more.

We are pleased to announce the return of the successful CDBA Storytelling Booth, taking place during the Peer Forum on June 4th and 5th. This booth is a dedicated space to spotlight the powerful work CDFIs, MDIs, and mission-focused bankers like you are doing to advance inclusive economic growth and empower underserved communities. It’s your opportunity to share your impact—and inspire others.