TY  - BOOK
AU  - Arriz,Irani
AU  - Arriz,Irani
AU  - Bruhn,Miriam
AU  - Stucchi,Rodolfo
TI  - Psychometrics as a Tool to Improve Screening and Access to Credit
PY  - 2015///
CY  - Washington, D.C.
PB  - The World Bank
KW  - Access to credit
KW  - Access to finance
KW  - Asymmetric information
KW  - Bankruptcy and resolution of financial distress
KW  - Banks and banking reform
KW  - Credit risk
KW  - Debt markets
KW  - Finance and financial sector development
KW  - Psychometric tests
N2  - This paper studies the use of psychometric tests, which were designed by the Entrepreneurial Finance Lab as a tool to screen out high credit risk and potentially increase access to credit for small business owners in Peru. The analysis uses administrative data covering the period from June 2011 to April 2014 to compare debt accrual and repayment behavior patterns across entrepreneurs who were offered a loan based on the traditional credit-scoring method versus the Entrepreneurial Finance Lab tool. The paper finds that the psychometric test can lower the risk of the loan portfolio when used as a secondary screening mechanism for already banked entrepreneurs-that is, those with a credit history. For unbanked entrepreneurs-those without a credit history-using the Entrepreneurial Finance Lab tool can increase access to credit without increasing portfolio risk
UR  - http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-7506
ER  -