UNSGSA -UN Secretary-General’s Special Advocate for Inclusive Finance for Development

Innovation Opens a Door for an Enterprising Fishmonger

How can an entrepreneurial fishmonger with no credit history hope to obtain the money he needs to expand his small business?

In Peru, an organization called the Entrepreneurial Finance Lab (a winner of the G20 SME Finance Challenge) has pioneered an innovative approach to gauging the credit-worthiness of poor businesspeople, with results that are transforming lives.

Severino walked the streets of Lima for many years delivering fish to local families. The tools he needed to expand his business—a car, a bigger refrigerator—were simple enough but they were beyond his reach because, like most poor people in Peru, he had no credit history and could not qualify for the loan he needed.

But then the Banco Financiero adopted the Entrepreneurial Finance Lab’s loan test, which relies on a detailed assessment of an individual’s business acumen and personal habits. This time Severino qualified easily.

Loan in hand, he purchased his first car, which allowed him to increase his customer base, offer a broader range of fish, and save for a better refrigerator so he can expand his business further. Now his enterprise is strong, he told the Special Advocate during her visit to Peru in 2014, his family’s prospects are stable, and his oldest child is receiving a higher education. The growth of one small business is fueling opportunity for the future.