MAKATI CITY, 05 April 2018 – CIC relate opportunities of cooperatives on access to credit data on the two-day compliance forum on BIR, DOLE, DTI, CISA and CDA for Cooperatives at Best Western Oxford Suites, Makati City.
Attended by 60 individuals representing micro, small, medium and large cooperatives, CIC Senior Vice President for Business and Development Group, Atty. Aileen L. Amor-Bautista, highlighted how vital for medium and large cooperatives to comply with the Credit Information System Act or CISA (R.A. No. 9510).
Atty. Amor-Bautista expressed how CIC understands the struggles of cooperatives that they are facing which is lending money to its member-borrowers but aren't discipline to have good payment behavior.
Out of 120 Million Filipinos, only 5% or 5 Million Filipinos have access to credit. Meanwhile, in other progressive economies, around 80% have access to credit. Even countries such Ghana and Kenya have been implementing digitized method over the traditional paperless method.
Credit Bureau vs. Credit Registry
Atty. Amor-Bautista has cleared the mistaken notion that credit bureaus and credit registries are one and the same. On her talk, she explained that credit bureau provides credit scoring, credit analysis, performs portfolio reviews and other value-added services based on data.
On the other hand, a public credit registry like CIC merely receives and deliver credit data and is no way offering any forms of loan or conducts investigation on a potential borrower.
Importance of CISA (R.A. 9510) to the economy
The objectives of this law are to lower interest rates and with less or no collateral. Studies have shown that there are countries whose economic growth are impeded due to lack of access to credit.
Opportunities on access aggregated credit
"Credit is part of life," Atty. Amor-Bautista said.
Countries such as Indonesia, Singapore, and even South Korea have advanced credit registry that paved way for their abrupt economic growth. The presence of a credible credit report presents anti-fraud and retainment of good borrowers.
She said that there are financing institutions willing to provide loan assistance to Filipinos but are having difficulties monitoring the payment behavior of a potential borrower. It is expected that once CIS becomes fully operational, individuals may obtain loans with minimal interest rates as long as it has established that the borrower has good payment behavior.
Data Privacy
The SVP for Business Development and Communications also assured the cooperatives that it doesn't violate the Data Privacy Act of 2012 (R.A. 1073) in submitting the credit data of their member-borrowers to the CIC for the latter law expressly states such.
She also mentioned that other submitting entities (SEs) won't be able to see as to which institutions a borrower has acquired a loan and it is only the pertinent borrower who can see the names of the institutions with whom he/she has loans with.
Cooperative Development Authority (CDA) on CISA
Although some cooperatives may view CISA as another added tedious task for cooperatives, Cooperative Development Authority (CDA) Senior CDS Ms. Anastasia Horan encouraged the participants in the forum to comply as it will benefit lending companies and the cooperative sector in the near future.
The CIS is currently on a beta test phase whereby entities submitting credit data could access without fees. According to Atty. Amor-Bautista, the free phase may end by the third quarter of this year.