Credit markets involve three main players: Borrowers, Savers, and Lenders. The lender-borrower relationship presents a unique challenge. Borrowers typically have an information advantage over lenders. The danger for lenders is that borrowers might conceal vital private information to gain better loan terms. The lender’s challenge is to assess a borrower’s true creditworthiness. Building trust can benefit both lenders and small business borrowers.
Painting by: Elizabeth Murray