The importance of Credit Bureaus Stefano Stoppani IFC – Credit Bureau Advisor. Defining Credit Bureaus.
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IFC – Credit Bureau Advisor
1. Personal information
name, current/previous addresses, tel. number, Personal identification number, date of birth and current and previous employers.
For businesses, some additional information will include identity of key stakeholders including shareholders and management personnel, etc.
The basic credit report is a standard document that contains details about financial behavior and identification information of an individual or business. A typical credit report includes 4 types of information:
2. Public information
3. Credit information
4. Credit histories’ requests
Credit reports typically do not contain – religious preference, medical history, personal lifestyle, political preference, friends, criminal record or any other information unrelated to credit. Nor is there information about other banking transactions such as deposit accounts.
Know-how /Software suppliers
Data Protection Bodies
Credit Bureau Operator
Public Registry Data
Private Data Suppliers
Other Vendors & Service Providers
Telecommunication Service Providers
The CB environment
The Credit Bureau requires collaboration between the bureau operator and other key actors:
Quality of PCB
(information shared by banks, MFIs, retailers, NBFIs, mobile operators)
(e.g. US, UK, Italy)
(e.g. information shared among banks only or retail only)
(e.g. Poland, Czech Republic)
(e.g. Korea, Morocco)
Percent of Applicants who Obtain a Loan
90% increase in access
Out of 100.000 Applicants 35.000 potential good customers are lost if assessment is based on negative info only.
Source: Barron and Staten (2003). Note: Figure shows the simulated credit availability assuming a target default rate of 3%
Percent Decrease in Default Rate
in default rate
in default rate
Source: Barron and Staten (2003). Note: Figure shows the simulated credit defaults assuming an acceptance rate of 60%
more credit, higher growth
Source: Doing Business in 2005