Sunday, August 21, 2016

"CIC CREDIT DATA BASE BY 2017"





   

Database expected by 2017

Tuesday, August 16, 2016
Data Collection. Credit Information Corporation President Jaime Garchitorena says they hope to have the country’s credit database running and accessible by early next year. While some institutions are slow to comply, he assured they want to assist them in submitting the required data, not penalize them. (Sun.Star foto/Arni Aclao)
STATE-RUN Credit Information Corporation (CIC) targets to start the credit database running and accesible by early 2017 amid limited information obtained from some financial institutions, specifically cooperatives.
This came from CIC President Jaime Garchitorena, who was at the Marco Polo Plaza Hotel in Cebu City yesterday to meet with some cooperatives.
“By early next year, they should be able to use the data in the process of lending. The first quarter of 2017 is our best case, but we are still dependent on the inflow of data submitted by the financial institutions,” the official said.
Presently, Garchitorena said some rural banks and a “very few” cooperatives have submitted their credit information to CIC, and he said the body is closely coordinating with the Bangko Sentral ng Pilipinas (BSP) and the Cooperative Development Authority (CDA).
“Rural banks still have issues (because) BSP and the banks are working out some mergers, acquisitions, and consolidation. Cooperatives are a bit of a different issue since they have a different regulator, the CDA,” he said, adding that they expect the CDA to issue a memorandum circular requiring all large and medium cooperatives to submit credit information to CIC.
Under Republic Act No. 9510 or the Credit Information System Act, banks, quasi-banks, their subsidiaries and affiliates, cooperatives, life insurance companies, credit card companies and other financial entities are required to submit basic credit data and updates on a regular basis to the CIC. The submission of basic credit data includes any negative and positive credit information that tends to update the credit status of borrowers.
“But beyond the benefit to their borrowers, their participation in the CIC’s credit information campaign is expected to alleviate common industry ailments, including non-performing loans and fraud, among others,” Garchitorena said.
The official said that by October, medium-sized cooperatives must be able to submit, at least partially, documents to CIC, and December for large cooperatives.
“We are not expecting a deep dive compliance from them. (Cooperatives) can create an account with CIC, and we are not asking them to give the (credit) data yet,” Garchitorena clarified.
Garchitorena expects to have substantial data by yearend, as all banks will be compliant within the year. Garchitorena said close to 100 percent of universal, commercial, and thrift banks have already complied with the requirement.
The CIC is also coordinating with telecommunication companies for sharing of data for its system, as this is the basic credit footprint of most people, Garchitorena said. He emphasized that having a credit information system will also help people get better access to loans.
CIC is a tool that can be used to protect the borrower from prejudicial lending practices that comes from a lack of credible, accurate, positive, and negative historical data, said Garchitorena.
“The more people entering credit registry through submission of loan data or other relevant data sources, the greater the likelihood of being able to grant a loan,” said Dr. Mario Lamberte, the team component leader of the USAID COMPETE Project.
For lenders, having a credit database can reduce non-performing loans by up to 75 percent and increase lending amounts by up to 200 percent without significantly increasing the risk of default or over-indebtedness. The resulting increase in revenues from interest and the reduction in provisioning for bad accounts will give coops greater latitude in lending more to those deserving of it, added CIC.
Aside from the benefits to both lender and borrower, Garchitorena wants it known that information being propagated by some claiming that CIC is penalizing cooperatives P30,000 per day for non-compliance is not accurate.
“The law states that we can impose penalty, but we choose not to,” Garchitorena explained.
At this stage, he said CIC will assist the cooperatives’ pain points, especially in the areas of data submission, availability of technology, and data quality.
“The CIC is more concerned with willful non-compliance, as this essentially means that lenders are willing to hide data that is essential to the economic growth of their borrowers and the country as a whole,” he added.
The CIC has been coordinating with the Cooperative Development Authority (CDA) led by Chairman Orlando Ravanera and supportive federations to help manage misinformation.

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