Banks will exchange information about positive loans with raised limits, on loans up to $500 000
Banks will exchange information about positive loans with raised limits, on loans up to $500 000. To remind readers, that banks begin change information about current and repaid loans, or simply positive loans, since April of 2007. The limit of loan information exchanged was only with $20 000 and contributors where only 4 large banks. After September of 2007 limit raised till amount of $100 000 and contributors of information raised to 10 Georgian Banks. Today, positive information share 15 banks, but it must be mentioned that $100 000 amount of limit cant represent full segment of business and mortgage debts, which gives not opportunity to see full liabilities of debtor, which frequently causes for him to take extra liabilities, according to this – risks are rising. Correspondingly this circumstance became issue of discussion from National Bank side and Donors side. Foresee this, our board of directors decided to offer to rise limit on loans to $500 000. Which was appreciated by Georgian banking sector too. According to agreement information will be exchanged only loans which were issue after 1 august of 2012.
“Creditinfo Georgia” and “National Bureau of Enforcement” signed agreement of cooperation
“Creditinfo Georgia” and “National bureau of enforcement” signed agreement of cooperation. According to agreement, National bureau of enforcement provides us identified information about individuals and legal persons which are registered in debtor’s registry according to Georgian law of enforcement procedures. This is detailed information, which includes random data: Amount of debt, Enforcement person coordinates, also date and reason of entering in this database.
Credit Decision Automation
Consumer credit volumes are increasing since the end of the worse of the crisis as both banking and consumer confidence returns.
Credit scoring with automated application processing system is the solution almost universally installed to effectively manage large volumes of consumer credit and to optimize returns.
This white paper is important reading to anyone who is involved in consumer lending as we provide guidance on successfully implementing these solutions. We evokemany examples from which to understand the full impact of introducing automation and credit scoring. In this white paper he explains the three key components required by consumer lenders, over and above the technology, to successfully manage the change from manual to automated application processing.
Key Messages for Successful Implementation of Lending Automation;
• Decision automation requires a companywide culture change
• Automation means changing the process
• Constant evolution, set initial performance indicators and continue to review and improve the decision process
Fast Expanding Retail Credit Markets
Experience in many expanding markets is that the increase in the volume in credit, and particularly unsecured credit, is followed relatively quickly by increases in impaired loans and bad debt. For example in Ukraine volumes increased by 97% from 2006 to 2007 alone, this was followed by very high bad debts losses.
The historical infrastructures designed to manage corporate loans and consumer savings are ill-equipped for the challenges generated by both the substantial increases in volume and the specific requirements of an unsecured lender. This lack of infrastructure is especially poor for the initial risk assessment where much of the process is manual.
Furthermore, as access to data increases with credit bureau and other data sources it is important to integrate this information with the internal and manual data.
The Credit Scoring and Automation Solutions
Business leaders faced with the opportunity to access the potential returns from the growing consumer lending market consider the methodology developed and implemented by markets that have had numerous years of experience in successful implementation. The solution almost universally installed in western banks is credit scoring with automated application processing system. It is the proven approach for making efficient high quality decisions in high volume environments, notwithstanding the criticism received as a result of poor application of the technology. Organizations successfully implementing such solutions could expect to see bottom line improvements in contribution many times over compared to manual processes as a result of sales increase and bad debt reduction. Further benefits generated from operating efficiencies have seen loans granted in minutes rather than the situation today where it can take hours or in some cases days. In western banks, these system changes also radically altered the customer’s experience of financial institutions to service oriented organizations as interviews and loan underwriting by skilled credit officers become the exception.
These benefits are also being recognized and taken by local banks. One of the most successful banks in the emerging credit markets Home Credit,is highly dependent on scoring technology. Tomas Spurney, Chairman of PPF Group (Home Credit) ,remarked in September 2008 edition of the Banker, “…scorecards, this is a significant part of our cost base, ………, as the landscape becomes more competitive, risk-cost management becomes even more important to meet targets”.
Beware of the Pitfalls
This multitude of benefits is clearly highly attractive to bank executives. Experience in other markets would indicate that it is almost a competitive advantage to compete in a consumer banking environment. Banks seek out the handful of providers of such technology, allocate a handsome budget and look forward to reaping the returns. Unfortunately the results for many executives are disappointing when a year later many decisions are still taking days and decline rates exceed expectations.
Initial reactions have often been to blame the technology.This reaction reveals the real underlying problem: Understanding the complexity of the change processes in parallel with the change in credit granting technology. It is important to select a partner that really understands the full requirements as often the technology provider can be to blame for not providing proper guidance and understand the wider changes required for effective implementation. The technology is only part of the solution; equally important are three other components which are critical to the conversion from a manual based decision process to a more automated process namely culture, process and evolution.
The culture change must be led top down from the executive team and will involve meeting a clear set of new objectives such as speed of decisions, accept rates, sales, debt levels and of course, written-off rates. In setting these objectives it is important to be realistic as some factors such as accept rate and debt levels are inversely related. In a recent example an eastern European bank automating a negative high risk cash loan product, set itself and its provider unachievable bad debt and accept rate targets. These objectives are companywide; application processing solutions are sometimes perceived as the domainof the risk team alone when in reality it will change the working practice of everyone in the bank. Risk solutions should greatly enhance the cooperation between the sales force of an organization and the credit controlling function.
Training and Education Key; This requires wholesale training not only in which buttons to push, but to understand why the bank is making this significant investment. As well as branch and head office personnel changes, marketing and sales must grasp this opportunity whether it be marketing the speed of decision or to offer higher loans due to improved risk assessment. Successful organizations whose executives have led this top down culture change have reaped the rewards. An international lender made a 5% increase in annual contribution within two years of implementing automated decisions at the start of the project from training of the whole executive team, to monthly reporting at the board meeting, which included feedback on the human resources and customer impact. Throughout the process the board were very conscious of the human impact to the 10 000+ people in their organization and were committed to the cultural change being a positive experience.
Process Change, Not Automation of Manual Process
Most banks operate a credit origination process that has evolved over time that is comparable to manual assessment. This can often involve passing paper to be collected, assessed by risk and security staff, and reviewed at the necessary mandate levels. Some applications are unnecessarily passed to committees who have to review the information for the application and likely revert due to lack of information. Encoding manual processes like the example mentioned here seldom yields better results. It is needed to approach the problem from another angle, incorporating not only the automation of decisions but also ensuring the appropriate information is available if the need for manual credit granting arises. We were asked to review a Danish bank that had implemented a new origination system that had an 80 % level of manual decision even though it had recently had a new system implemented. It was certainly not meeting the 25% maximum manual decision level that was the CEO’s objective. In this case, the credit manager had the credit granting rules used in the previous solution replicated. Most of these rules were encoded in the scorecard within the solution or proved to be a hindrance in the credit granting process. Education of the existing management teams is crucial to understanding how a new process will impact and meet the executives’ objectives.
The initial implementation of an automated scoring solution will generate a significant initial improvement in the level of risk accepted into the debtor book and the turnaround times to process applications. The initial scoring solution will often be an expert or generic model, or the decision strategies relatively cautious where no data is available for development. The success of automaton and credit scoring depends on a process powered by knowledge gained from data and not so much from information passed on by credit controllers.
It is important to set goals for key performance indicators such as accept rate, default rate, automatic decision rate, decision time. What is new with automation all these strategic aspects are under the direct control of the executive, overnight the accept rate can be changed at the amendment of parameter such as the score cut-off.
This enables a credit granting process to be more objective and consistent since most of the decisioning is done by a system. It is crucial to the sustainability of the solution to periodically review it by utilizing the history of applications that were accepted and the non-payers booked by the solution. These review mechanisms are not only limited to the scorecards but can also be aligned to reflect changes in the economy or updates in the strategies as set out by the executives. Scorecards have a shelf life. It is crucial to monitor and, if the need arises, to re-weight or re-develop the scorecard.
Significant Benefits for Leading Banks
Fundamental to an effective automated decision process is fast parameterized and bug free technology, a culture change, process re-engineering, predictive analytics, usually in the form of credit scoring and a long term review cycle.
Our experience at Creditinfo Decision across many markets has shown that this is not sufficient and must include broader changes strongly sponsored by the executive.For this reason we work across all levels from the executives to the users from a broader change management perspective to ensure the full objectives are met and returns on investment are achieved across the business. Banks will only truly gain the rewards if they invest time and effort in bringing about a bank wide culture change, change the origination process and to evolve the process over time.
For further details contact;
Tel: +420 236 080 400
“Creditinfo Georgia” and GSM operator “Mobitel”, which is operating on the territory of Georgia under brand name “Beeline», signed a contract of cooperation.
“Creditinfo Georgia” and GSM operator “Mobitel”, which is operating on the territory of Georgia under brand name “Beeline», signed a contract of cooperation. Company’s management assumes that effective using of “Creditinfo`s” services will provide significant increase of sales, especially in the field of issuing loans for product and services(filling talking balance, roaming services, also distribution and installation of random type TV-communication equipment using inner credit). Carrying out of this type of operations based of Creditinfo would be an “stopping” factor, which decreases probability of not fulfillment of taken obligations, because of getting in “Creditinfo”’s “overdue and unpaid obligations database” will harm significantly image of the company or individual. Also, by beforehand checking in our database, potential clients financial condition and stability information, financial risk analyzes would be made.
From September 30, 2011 JSC Creditinfo Georgia will change its address and its new contact information shall be as follows:
Address: 13, Mosashvili str., 0162, Tbilisi, Georgia Tel/fax: (+995 32) 262 35 55 Magtifix: (+995 7 90) 912 509
Database of Persons with tax debts and sanctions
In July of 2011, JSC “Creditinfo Georgia” and Revenue Service of the Ministry of Finances of Georgia signed an agreement. According to this agreement Revenue Service delivers information from it’s own databases to “Creditinfo Georgia”about persons with identified tax debts and sanctions amounting to 1000 GEL. On it’s part, JSC “Creditinfo Georgia” provides these data to it’s customers – commercial banks. Signing this agreement was preceded by Georgian Government 2011 26 July decree # 295 and changes in tax code, which gives right to revenue services to give mentioned above identified information to “Creditinfo Georgia”.
Creditinfo Georgia Launches Creditinfo Predictor Score
Creditinfo Georgia, the countries credit bureau, has launched the markets first credit bureau score, Creditinfo Predictor. The score was developed by risk management experts Creditinfo Decision. Creditinfo Predictor will summarise the complex credit reports in a highly predictive and easy to use score that will provide improvement effectiveness and efficiency to credit grantors in Georgia. The launch at the Radisson Hotel in Tbilisi was attended by over 50 representatives of the banks, credit grantors, telecom operators and regulators. The launch was opened by Alexander Gomiashvili, Manager Director of Creditinfo Georgia, who got things off to a lively start with a short video; http://www.youtube.com/watch?v=Lj-rLhKE4a8 . Attendees were then given an insight into the model development by Creditinfo Decision senior consultant Filip Trojan. He described the four process of in-depth analysis of over 2 million records, and how the international experience was used to enhance the results. The final section delivered jointly by Paul Randall and Vratislav Houzvicka from Creeditinfo SCHUFA explained how Creditinfo Predictor can be used throughout the credit cycle for increased efficiency and effectiveness. Examples were shown from pre-screening, application assessment, customer management and collections. A New Phase in Development at Creditinfo Georgia Creditinfo Georgia has been working diligently to provide the necessary core services to support credit grantors in an active and growing market. Over the last 5 years it has grown to be central to all lending that occurs in Georgia. The Creditinfo Predictor launch announces the start of the second phase of support for credit grantors with the provision of value added products such as Creditinfo Predictor. According to Alexander Gomiashvili, Manager Director of Creditinfo Georgia, “Having worked with our shareholding and partner banks to achieve a high quantity and quality of information we knew it was time to provide this advanced service. We are very proud to be able to offer Creditinfo Predictor to our customers, especially with the confidence of the quality of working jointly with our strategic partner and a shareholder – Creditinfo Schufa”. About Creditinfo Decision Creditinfo Decision is a risk management consulting firm that specialises in the development of risk models as part of the Creditinfo SCHUFA Group GmbH. We are the trusted advisor to the major financial organisations and our credit bureau partners in emerging and small credit economies. Our aim is to improve the risk management infrastructure of our clients with a strong focus on the strategic objectives of the organisation. Through our solutions and advice we have already made substantial improvements to the performance of organisations and continue to have a passion for innovation. About Creditinfo Solutions Creditinfo Solutions is the provider of core solutions in credit risk management and credit bureaus. The provider of the credit bureau software and decision engine to a number of credit bureaus including Creditinfo Georgia. Their customer life cycle solutions are also provided to credit grantors and telecoms
Currently total number of records in database of Creditinfo Georgia is 2 142 816 .
Share of covered loans in the positive credit data is – 56.06%
Share of covered loans in the overdue credit data is – 41.74%
Currently 805 000 physical persons and 11 500 companies can be found in the database.
Changes in the Supervisory Board
According to the resolution of the Shareholders’s Meeting of October 27, 2010 changes were made to Supervisory Board. Now the Chairman of the Board is Hakon Stefansson (Creditinfo Group) and the members of the Board are: Maia Meredova (ProCredit Bank), Vasil Verulashvili (Bank of Georgia), Tea Lortkipanidze (TBC Bank), Nino Berishvili (Bank Republic) and Aiety Kukava (National Credit Information Bureau).
The number of records in the database of Creditinfo Georgia has exceeded 2 000 000
The number of records – information about current and covered and also defaulted and overdue debts in the database of Creditinfo Georgia – has exceeded 2 000 000. The percentage ratio i.e. the percentage of the covered loans in the positive and also the negative databases by October 1, 2010 is the following:
Share of covered loans in positive loans – 58.51%
Share of covered loans in negative loans – 43.28%
By this time 765 665 physical persons and 11 086 companies can be searched in the database.
The number of records in the database of Creditinfo Georgia has increased almost up to 1 900 000
The number of records in the database of Creditinfo Georgia i.e. information about current and covered loans and also the defaulted and overdue loans has increased almost up to 1 900 000 . Percent ratio of the covered loans in both positive and negative databases by August 2, 2010 is as follows:
percentage of covered loans in positive loans – 59.32%
percentage of covered loans in negative loans – 41.22%
Total number of positive loans – 1 180 690; including covered loans – – 683 290 (57.87%) Total number of negative loans – 316 594; including covered loan – 126 972 (40.10%)
Total number of positive loans – 1 115443; including covered loans – 606 940 (54.41%) Total number of negative loans – 313 058 ; including covered loan – 123 536 (39.46%)
Total number of positive loans – 1 076 843; including covered loans – 582 322 (54.07%) Total number of negative loans – 307 581 ; including covered loan – 117 343 (38.15%)
Shareholders Meeting of JSC Creditinfo Georgia approved changes in the Supervisory Board. Supervisory Board members were approved as follows: -Mr. Vasil Verulashvili instead of Mr. Sulkhan Gvalia, (JSC Bank of Georgia); – Ms. Nino Berishvili instead of Mr. Michel Forestie, (JSC Bank Republic);
Total number of positive loans – 1 039 739; including covered loans – 564 300 (54,27%) Total number of negative loans – 304 782; including covered loan – 112 833 (37,02%)
The number of records in positive database of Creditinfo exceeds 1 000 000
The number of records in the positive database of Creditinfo i.e. the records about currents and covered loans has exceeded 1000 000. The percentage ratio i.e. the percentage of covered loans in positive database as well as in negative database by February 1 is as follows: Total number of positive loans – 1 000 514; including covered loans – 542 353 (54,20%) Total number of negative loans – 300 145; including covered loan – 113 114 (37.69%)
The percentage ratio i.e. the percentage of the covered loans in the positive and also the negative databases by January 1, 2010 is the following:
Total number of positive loans – 983 679; Among them the covered loans are – 526 706 (53.54%) Total number of negative loans – 294 520; Among them the covered loans are – 110 200 (37.41%)
The percentage ratio i.e. the percentage of the covered loans in the positive and also the negative databases by December 1, 2009 is the following:
Total number of positive loans – 911 372; Among them the covered loans are – 506 457 (55.57%) Total number of negative loans – 291 204; Among them the covered loans are – 106 145 (36.55%)
General periodical statistics for the records of Creditinfo database
The percentage ratio i.e. the percentage of the covered loans in the positive and also the negative databases by November 2, 2009 is the following:
Total number of positive loans – 885 230;
Among them the covered loans are – 477 349 (53.92%)
Total number of negative loans – 286 905;
Among them the covered loans are – 102 576 (35.75%)
From October 1st information about the number of records in the database of Creditinfo Georgia will be published on the company’s web-site
From October 1st information about the total amount of records in the database of Creditinfo Georgia will be published on the company web-site. Also, the number of positive (current and covered loans) and negative (delinquent and outstanding loans) records by certain date will be provided. Besides we will provide general statistical information about percentage ratio of current and covered loans and also the delinquent loans already covered.
The company management came to such decision because of increasing interest of society and especially the representatives of media in respect of Creditinfo data, and also for the purpose of preventing use of incorrect/inaccurate information while appealing to statistical data which has been the case quite often lately.
The percentage ratio i.e. the percentage of the covered loans in the positive and also the negative databases by October 1, 2009 is the following:
Total number of positive loans – 864 245;
Among them the covered loans are – 461 619 (53,4%)
Total number of negative loans – 278 682;
Among them the covered loans are – 122 327 (43,8%)
It should be mentioned that according to the data of the second half of July, 2009, from the total amount of current positive loans the covered loans equaled 51.3%, while from the total number of negative loans the covered loans were – 34.9%.
My Creditinfo – is the name of the new product to be offered to the customers by Creditinfo Georgia from October, 2009
My Creditinfo –is the name of the new product to be offered to the customers by Creditinfo Georgia from October, 2009. With the help of this service anyone may view the information and data about himself/herself stored in Creditinfo database anytime via internet without addressing banks. The user will be able to check regularly all the changes related to his/her credit history. For getting access to this system customer has to make an agreement with Creditinfo Georgia and have his/her username and password registered; after paying respective price he/she will be authorized to access the database and view necessary information. The service price is quite reasonable. 15 GEL shall be the payment per one year for natural persons. In case of purchasing the pack of 25 GEL the user in addition, will immediately be notified of the changes about him/her made in the database ( new loans, balance after paying an installment, delinquency, etc.) and also about the third person having viewed the information about the customer in the database and the date of such viewing. The price of such service for the companies operating in Georgia shall be 50 (fifty) GEL.
Creditinfo Group hf and SCHUFA Holdings AG sign Joint Venture agreement
Creditinfo Group hf and SCHUFA Holdings AG today signed an historic Joint Venture agreement, resulting in the formation of a new holding company, Credinfo SCHUFA GmbH, registered in Wiesbaden, Germany. The new company will be jointly managed by Reynir Grétarsson, the current CEO of Creditinfo Group and Dieter Steinbauer, current Member of the Executive Board of SCHUFA, in the capacities of joint Managing Directors. All existing Creditinfo subsidiaries will retain their current registrations as members of Creditinfo SCHUFA GmbH. The Joint Venture brings together the competencies of both credit risk specialist organisations under one umbrella, enabling us to offer our customers a wider range of risk management products, services and software and increase the reach of our consulting and analytical services. Together with our partners we will be serving customers in most of Europe. Creditinfo acknowledges Straumur Investment Bank’s valuable advice during the contract negotiations. Staumur is Iceland’s largest investment bank and is headquartered in Reykjavik, with a presence in 10 countries.
At the signature, Mr. Rainer Neumann, CEO of Schufa Holding AG, Chairman of the board of Creditinfo Schufa GmbH, Mr. Reynir Grétarsson, CEO Creditinfo Group and Creditinfo Schufa GmbH, Prof. Dr. Dieter Steinbauer, COO Schufa Holding AG and Creditinfo Schufa GmbH.
Positive Loans Database already includes information on credits up to 100.000 USD
Positive loans database already includes information on credits up to 100,000 USD. Up until now banks and MFO-s exchanged data about the loans below 20,000 USD that mainly covered consumer loans. After the Increase of the limit up to 100,000 USD the database will contain a large part of mortgage and business loans too. Currently we have 9 financial institutions exchange positive information. However, this number will probably increase by the end of the year. As of today there are more than 500,000 records in the current and repaid loans database
Current and repaid loans database already contains more than 100 000 records
In March 2007 Creditinfo Georgia launched one more new service, Information on Current and Repaid Loans. This service is the first step in the exchange of positive information. Our clients will have an opportunity not only to see the existing loans of their credit applicants, but also their positive credit history. At this stage information is exchanged on the loans below USD 20 000. Development of the abovementioned service will promote competition in the financial sector and will enable our clients to offer better rates to their customers with positive credit history. Time necessary for processing of loan applications will be reduced substantially as well. By entering a name or an identification number into a search engine our clients will have an opportunity to find out the following information:
On outstanding loans: – Disbursed amount
– Current balance
On loans repaid: – Disbursed amount
– Repayment Date
Currently positive information is exchanged not only by some of the leading Georgian banks but also by leading Micro-financial Institutions. Only after 6 months from the launching of this service the database contains more than 100 000 records. It is significant, that the number of records is rapidly increasing. At the same time it should be noted that growth trend in the number of inquiries to the database is very impressive as well. If in January Creditinfo Georgia had only 19 000 inquiries, in August the number exceed 100 000 and in September it reached 147 000.
Number of Creditinfo Georgia’s clients is consistently increasing
Since the beginning of the year JSC Creditinfo Georgia signed contracts with several respected Georgian Banks such as: Peoples Bank, Basisbank, Standard Bank. Thus, we could say that Creditinfo Georgia, which is the only credit information reporting/providing company in the country is in full control of the local market.
Changes in the Supervisory Board
Starting from March 2007 we have new members on the board. Chairmen of the board is Mr. Philipp Pott (ProCredit bank). Board members: – Mr. Olafur Vilhjalmsson (Creditinfo Group), – Mr. Sulkhan Gvalia (Bank of Georgia), – Ms. Nino Masurashvili (TBC Bank), – Mr. Ayety Kukava (National Credit Information Bureau), – Mr. Michel Forestie (Bank Republic Societe Generale Group).
Current and repaid loans database
Creditinfo Georgia launched one more new service, Information on Current and Repaid Loans. This service is the first step in the exchange of positive information. Our clients will have an opportunity not only to see the existing loans of their credit applicants, but also their positive credit history. At this stage information is exchanged on the loans below USD 20 000.
Changes in the Supervisory Board
In May 2006 instead of Mr. Giorgi Aslanikashvili and Mr. Giorgi Kananashvili the board members became Ms. Nino Masurashvili and Mr. Irakli Chitiashvili representatives of TBC Bank and Bank Republic respectively.
List of banks which use Creditinfo Georgia’s database at the end of 2005
For the mentioned period we signed contracts with almost all leading Georgian banks, such as: TBC Bank, Bank of Georgia, United Georgian Bank, ProCredit Bank, Bank Republic, Silk Road Bank and Invest Bank. Also we have already signed agreements with some other financial institutions and international organizations.
Since the end of December 2005 Creditinfo Georgia’s clients can use a new product – Monitoring service. This Service allows you to keep track of the status of your customers or partners in the easiest possible way. You submit a list of the companies and individuals you need to keep track of to our servers. We email you every time there is any change in the critical information you need.
Creditinfo Georgia has a new chairman of the Supervisory Board
In September 2005 Mr. Philip Sigwart, General Manager of ProCredit Bank became the chairman of the Supervisory Board of JSC Creditinfo Georgia. He knows specificities of Georgian financial market, currency and credit system and also trends of its development. This will help us to meet the operational and data requirements of our clients. Also we changed Supervisory Board structure, instead of Mr. Dimitri Kemoklidze the board member became Mr. Giorgi Kananashvili, representative of the Bank Republic.
Emission of new shares
According to the September 2005 decision of Shareholders meeting JSC Creditinfo Georgia issued new shares. Issued shares were purchased by one of the leading Georgian bank – Bank Republic. This fact points to a high prospect of using our products and to the increasing image of our company on the local market.
JSC Creditinfo Georgia launched it’s first product
Stranting from July 2005, only after 5 months from the establishment of the company JSC Creditinfo Georgia launched it’s first product, Defaulting Debtors Database. DDD is a centralized database with processed information from official (courts, statistics department, tex department, etc.) and unofficial sources (customers of Creditinfo, banks, MFIs, leasing, telecommunication companies, etc.) concerning defaulted debts on individuals and companies.