Legible but Not Included: Consent-Based Commercial Data Sharing and the Two Margins of SME Credit in Hong Kong

Abstract

The Hong Kong Monetary Authority's Commercial Data Interchange (CDI) is a consent-based public gateway that converts a small firm's transaction records into hard, portable information for lenders. The regulator's own evaluation reports that banks using CDI intensively charge 36 basis points less and require 1.1 fewer collateral items on new small and medium-sized enterprise (SME) loans. This paper reads that result against the theory it is meant to instantiate. Through a documentary single-case design, pairing CDI with the United Kingdom's mandatory Commercial Credit Data Sharing scheme and comparing sectors within the case, we argue that the benefit falls on the intensive margin and accrues to firms already legible to the data ecosystem. On the operator's own appendix tables, the collateral effect is confined to five transaction-data-rich sectors, and the interest-rate effect outside them is marginal. No effect appears on loan size or tenor, and no evidence exists on approval rates. We therefore theorize consent-based commercial-data infrastructure as an instrument that redistributes the returns to legibility among the already-legible rather than one that extends the credit frontier. Hardening soft information is not the same as relaxing the credit constraint.