Experiences in Implementing Credit Bureau in Cambodia BNM-AFI Access to Financial Services for the Micro, Small and Medium Enterprise (MSME) Programme on 14-17 October 2014 Heng Bomakara Licensing Department National Bank of Cambodia The views expressed in this presentation are those of the presenter and do not necessarily represent the views of the National Bank of Cambodia 1
Content of the Presentation 1. The Structure of the Banking System in Cambodia 2. Credit Bureau Cambodia 3. Roles of NBC s Credit Bureau Supervision Division 4. Data Contributor s Responsibilities 5. Consumer Rights 6. Dispute resolution 7. Current data of the borrowers and amount of credit 8. Challenges 9. Conclusions 2
1. The Structure of the Banking System in Cambodia 3
2. Credit Bureau Company Cambodian private Credit Bureau was established in early 2012. The CBC system was officially launched to operate credit information sharing among banking and financial institutions. Prakas on Credit Reporting, which was developed on 24 May 2011, mentions that CBC acts as the intermediary to collect and distribute information to member institutions based on rules of reciprocity. 4
3. Roles of NBC s Credit Bureau Supervision Division To oversee compliance with Prakas on Credit Reporting. To gather statistics on bureau performance, lender activity and trends within financial sector. Responsible for supervision of Credit Bureau Cambodia CBC (on site inspections) as well as all members of CBC including covered as well as non covered entities. Responsible for reporting non compliance to NBC Management and making appropriate recommendations for sanctions/penalties. 5
4. Data Contributor s Responsibilities NBC Required to contribute complete portfolio of positive and negative information within 5 business days of end of every month. Must keep data secure and confidential. Required to obtain borrower s written consent. Have detailed consumer rights procedures established and available at all premises and on website. Must investigate borrower complaints and correct data within 10 business days. 6
5. Consumer Rights NBC Entitled to request copy of Credit Report once per year free of charge but more often with payment of fee. May request correction of incorrect or incomplete information at any time. Have access to details of consumer rights procedures at lenders premises and obtain assistance. 7
Fee Charge NBC 1. Membership fee: 13,000USD 25,000USD 2. Annual subscription fee: 5000USD 15,000USD 3. Transaction fee - Lite Report (less than 500USD) : 0.20$/report - Standard Report (more than 500USD) : 3.00$/report Lite report $0.18 Standard report $2.50 Standard report $3.50 KHR 2,000,000 > 2,000,000 > 40,000,000 USD 500 > 500 > 10,000 THB 15,500 > 15,500 > 310,000 LAK 4,000,000 > 4,000,000 > 80,000,000 VND 10,500,000 > 10,500,000 > 210,000,000 8
6. Dispute Resolution NBC All institutions including NBC, CBC and all members of CBC must have operational, easily understood and accessible DR processes. Have detailed consumer rights procedures established and available at all premises and on website. Must investigate borrower complaints and correct data within 10 business days. Must notify borrower of adverse action within 5 business days. Must update incorrect data in CBC. CBC to notify all lenders who made enquiry with last 3 months of corrected information. CBC to report dispute resolution statistics to NBC 9
10 business days NBC consumer CBC Open File Search in CBC No Hit Investigate with data source Hit Notify consumer Source confirms Source corrects data Notify the consumer Notify users Appeal to NBC No Consumer ok? Yes Close file Juridical system 10
7. Current data of the borrowers and amount of credit Amount of credit by Banks and MFIs (by July 2014, in Million USD) 2011 2012 2013 Aug-2014 Bank Loan 4,326.41 5,845.87 7,351.78 8,473.15 MFI Loan 641.56 885.83 1,317.08 1,681.31 Number of borrowers and amount of credit by Banks and MFIs (by August 2014, in Million USD) 2013 Aug-2014 Number of borrowers by Banks 345,255 401,129 Number of borrowers by MFIs 1,539,618 1,705,698 Amount of credit by Banks 4,067.06 4,526.40 Amount of credit by MFIs 1,254.49 1,740.15 11
8. Challenges NBC Data Quality Awareness program Publication External auditor Support information for systemic risk assessment 12
9. Conclusion The Credit Bureau plays an important role in promoting and improving access to finance, especially for Cambodian people in rural areas. From a macro perspective, the credit bureau provides a vital role in promoting transparency within the credit industry. From the banking and financial institution perspectives, credit reports are used as a tool to mitigate credit risk. 13
Thank you for your attention? 14