There is a worldwide problem in that not enough people have access to financial opportunity in underserved markets; at LendIt USA 2017 we hosted a panel that focused on impact investing and opportunities for the underserved in financial services; panelists discussed the size of the market, how technology has helped to close the gap and why they feel that investing with their hearts and wallets is the better way to go; the discussion talked through the difference between regular investing and impact investing, as well as what investors look for when an opportunity presents itself; technology has allowed for low to middle income families to have a better understanding of their daily financial health and to expect better services; the panel also touched on the risks involved in certain markets, how to assess potential investments in emerging markets and how the local regulatory bodies can play a role; looking at investments beyond the financial return has helped communities around the world and this looks to be a trend that is on the rise. Source
USA
The Federal Reserve has released a report titled "Small Business Credit Survey Report on Startup Firms" with findings based on the 2016 Small Business Credit Survey which surveyed companies less than five years old with more than one and fewer than 500 employees; findings show that these companies face greater funding challenges than mature companies; report compares financing statistics of startups and mature companies; also reports on sources of funds noting that medium to high credit risk startups were more likely to apply for loans from online lenders and only 11% of low credit risk startups sought online loan financing. Source
Lawmakers have long been arguing that the regulations enacted after the financial crisis have hurt the bank's lending business; Greg Lyons, a partner at Debevoise & Plimpton law firm, tells American Banker: "It's not the kind of issue that lends itself to crisp, absolute answers, unfortunately, it's a more amorphous and an ideological view as much as anything else. There's not necessarily a right or wrong answer. It depends on what your objectives are."; in a recent survey of small businesses by the New York Fed only 8% said credit was too expensive/hard to find and 47% said there is sufficient credit in the market; the area most affected by regulations is that of borrowers with less than perfect credit, this market has been hampered by the capital ratio requirements; while certain areas of the market have felt the regulatory burden, overall businesses are able to find the credit they need; the argument will surely continue as policymakers look to ease the most stringent rules. Source