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> Posted by Lizzy Bolze, Project Specialist, Investing in Inclusive Finance, CFI

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The recent security breach of credit reporting agency Equifax exposed birth dates, social security numbers and credit card information of up to 143 million consumers. The hackers will likely sell this personal information which could result in financial and medical identity left, and fraudulent credit card activity and tax reporting, along with a slew of other activities. Earlier this week Equifax announced their CEO, Richard Smith will be retiring and could walk away with $18 million in pension benefits. The Massachusetts Attorney General, Maura Healey called it “the most brazen failure to protect consumer data we have ever seen.” As a result, the Federal Trade Commission, members of Congress and multiple states’ authorities are looking into criminal investigations. However, the burden of this breach will fall primarily on individual consumers to ensure they are protected, and only 10 percent of the potential 143 million affected have even checked the Equifax site to see if their information was compromised. (You can check to see if you may have been impacted here.)

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> Posted by John Hartman, President, International, Equifax

This post is part of Financial Inclusion Week, a week of global conversation on advancing financial inclusion. This year’s theme is keeping clients first in a digital world. Throughout the week participants will share their thoughts in events and webinars, on social media, and through blog posts. Add your voice to the conversation using #FinclusionWeek.

Easy access to credit is something most of us take for granted. Getting the green light from the bank may depend on how you pay your day-to-day bills and your repayment history on any previous loans. A good credit history can create financial opportunity and is an important part of economic mobility.

Credit histories, however, are nowhere to be found or are extremely limited in a number of countries around the world, such as the rural regions of El Salvador, Paraguay, and even India. Farmers living in these regions have always operated outside the global financial system. It may not surprise the readers of this blog to learn that over 40 percent of the Indian population is unbanked, which means roughly 500 million people do not have access to financial services. In Latin America, the World Bank says this figure is even greater, with 61 percent of the population lacking access to formal financial services.

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> Posted by Susy Cheston, Senior Advisor, CFI

Almost three decades ago, I walked into a meeting with a loan officer at a major bank in Boston. I was running a not-for-profit dance company that was well-respected, had good governance, and had a decent business plan—but hey, it was a not-for-profit dance company with no endowment and no certainty of surviving beyond its next show. We were not a good risk on paper. My job was to persuade the loan officer to give us an unsecured line of credit based solely on our business plan and his judgment of our ability to execute against that plan. He looked at our financials, but he also sized me up. This was not data analytics, this was the old-time community bank model of a decision based on a hand shake and a relationship, a sense of trust. Truth be told, the loan officer was biased in our favor. He really loved our work and believed in what we did. That plus a few well-placed board members had gotten me in the door where a company with a similar balance sheet and risk profile would have been left out in the cold.

A few years later, I landed in El Salvador where I formed lending groups among poor, illiterate women in the relatively early days of microfinance. “Ella es buena paga” was the phrase the women used to identify someone who was known as good for paying her debts. It meant that when a vendor in the marketplace or the owner of a corner store let a customer buy something on credit, she was good for it. On the basis of a reputation as “buena paga,” the lending group would allow a woman to join them. Needless to say, those who were known as “mala paga” would be blacklisted and not permitted to join the group.

Perhaps the greatest microcredit miracle of the last century was that, thanks to these lending groups, poor women who were credit invisible were revealed as credit worthy, identified as such through social relationships and their standing in the community. It was the kind of relationship-based credit decision that I and our dance company had benefited from in Boston, but that people at the base of the pyramid had always been excluded from.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.