Establishment of the Credit Risk Database: Concrete Use to Evaluate the Creditworthiness of SMEs

27 Pages Posted: 19 Apr 2019

See all articles by Satoshi Kuwahara

Satoshi Kuwahara

CRD Credit Risk Database

Naoyuki Yoshino

Asian Development Bank Institute

Megumi Sagara

CRD Credit Risk Database

Farhad Taghizadeh-Hesary

Waseda University

Date Written: February 21, 2019

Abstract

The credit risk database (CRD) makes it possible to mitigate the problem of information asymmetry between small and medium-sized enterprises (SMEs) and financial institutions and contributes to improving SMEs’ access to finance by collecting a large number of financial statements through the mechanism of SME finances and establishing a robust statistical model. We use the CRD in Japan, confirm the situation in Japan, and highlight the CRD’s contribution to evaluating the creditworthiness of SMEs. We also explain how to establish the CRD as a financial infrastructure, while indicating that the CRD and the scoring model based on it have maintained their quality owing to their operating system. We hope our experience contributes to the introduction of a statistical credit risk database composed of a large number of anonymous financial statement data in other countries and that the CRD helps to improve SMEs’ access to finance as a financial infrastructure.

Keywords: credit risk database, CRD creditworthiness, SMEs in Japan

JEL Classification: G21, G28, G32

Suggested Citation

Kuwahara, Satoshi and Yoshino, Naoyuki and Sagara, Megumi and Taghizadeh-Hesary, Farhad, Establishment of the Credit Risk Database: Concrete Use to Evaluate the Creditworthiness of SMEs (February 21, 2019). ADBI Working Paper 924. Available at SSRN: https://ssrn.com/abstract=3374751 or http://dx.doi.org/10.2139/ssrn.3374751

Satoshi Kuwahara (Contact Author)

CRD Credit Risk Database ( email )

Japan

Naoyuki Yoshino

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Megumi Sagara

CRD Credit Risk Database ( email )

Japan

Farhad Taghizadeh-Hesary

Waseda University ( email )

1-104 Totsukamachi, Shinjuku-ku
tokyo, 169-8050
Japan

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