Underserved Latino-Owned Businesses Benefit From More Accurate Scoring Alternatives

LOS ANGELES, Oct. 26, 2021 /PRNewswire/ -- Camino Financial's Q'3 2021 Latino Small Business Credit Survey points to emerging credit demand among smaller Latino-owned Businesses (LOBs) with the intent to invest in digitalization, but traditional credit evaluation tools inhibit their access to capital. Key findings indicate that 39% of applicants in Q3'21 did not have a traditional credit score, but were able to obtain funding through the use of Camino Financial's proprietary CaminoScore technology.

Beyond the challenges of accessing credit, our report indicates that LOBs maintain a positive outlook when it comes to digital adoption, enabling them to reach new customers, digest data and arrive at decisions faster, and at lower costs.

Latino market insights include:

• Lower-revenue LOBs intend to grow quickly - 26% of LOBs reported that they've started offering different products and services in the last quarter, and 51% stated they plan to do  the same in the next quarter
• Lower-revenue LOBs are digitalizing to drive growth -  In the next three months, 37% of LOBs surveyed intend to invest in more digital marketing tools and 33% of LOBs plan to adopt new digital payment options
• Lack of access to capital impedes conversion to digital -  53% of LOBs stated that lack of access to capital is their biggest challenge

Using technology like the CaminoScore to accurately identify, evaluate, and support LOBs is fundamental to building resilience and propelling their growth in the digital age. Traditional credit score trends indicate that lender approval rates remain low, hindering their ability to expand and digitalize. Existing credit-evaluation tools, while important, are not fine-grained enough to adequately assess the risk of lending to LOBs. Utilizing alternative scoring models offer LOBs operating in underserved areas better, less burdensome terms, freeing up more capital for growth.

Download and subscribe to the Survey here.

About Camino Financial
Camino Financial is the first AI-powered Community Development Financial Institution ("neo-CDFI") expanding access to credit for underserved Latinx entrepreneurs in the U.S. The Company is uniquely positioned to offer affordable loans as it combines its proprietary AI technology with access to CDFI designated low-cost capital and resources. Camino Financial has also produced the largest bilingual content hub to empower Latinx entrepreneurs to thrive and graduate into lower cost, longer term credit products. 

SOURCE Camino Financial, Inc.