“The country’s credit registry said more Filipinos’ basic credit data were loaded after the Credit Information Corp. (CIC) recently deployed its primary ID number (PID) tagging system.”
The state-run CIC said in a statement over the weekend that its database, now with the PID system in place, was able to include borrowers who do neither have a tax identification number nor identification cards issued by the Social Security System and the Government Service Insurance System.
The Credit Information System is also now accepting unified multi-purpose ID and driver’s license, leading to the expansion of CIC’s database.
CIC President Jaime Casto Jose P. Garchitorena was quoted in the statement as saying that the tagging system resulted in additional six million borrower records in less than a month, bringing the total data set of unique individuals to 18.2 million—or 26 percent of the adult population—as of August.
“Ma. Bernadette B. Bautista, acting head of the Credit Information Management Systems Group, said the system-tweak also led to more loan data loaded from non-MFIs.”
“Our records show that these enhancements have led to an initial average decrease of rejection rate of major banks from 35 percent to 3.5 percent and, in the case of specialized lenders—such as those who give credit to motorcycle buyers whose main ID was driver’s license—the leap was more dramatic from 90 percent to 5 percent rejection rate,” Bautista explained.
Garchitorena said that the primary reason for having a credit registry is to “democratize the benefits of having data.”
He said this means that more Filipinos should be able to prove their creditworthiness when applying for loans from microfinance institutions, cooperatives, rural banks and even the major banks.
“The CIC recognizes that it is the new player in the credit data space and understands the important role and contribution to the consumer economy of the credit cards industry that essentially gives collateral-free credit,” Garchitorena said. “Data-driven risk management is most critical when there’s only a behavioral or reputational asset to back up the credit line.”
The CIC said it has 58 accessing entities comprising of savings and loan associations, rural banks, cooperatives, thrift banks and universal and commercial banks.
In addition, HC Consumer Finance Philippines Inc., Toyota Financial Services Philippines Corp. and Small Business Corp. are also accessing the credit database.
“Financial institutions need to improve their visibility of borrowers’ credit behaviors to improve their asset quality while borrowers with good credit history may need to have their credit extended,” he added. -- Tyrone Jasper C. Piad
Source: BusinessMirror