For more than six years, Credit Bureau Cambodia (CBC) has worked hard to ensure that the Kingdom’s financial sector has access to the data it needs to practice low-risk, responsible lending. But even in the age of information, knowing who to trust is not always so simple. CBC CEO Oeur Sothearoath said that information asymmetry was one of the main challenges preventing financial institutions from properly mitigating risk.
“The solution that we are providing for them is to enable financial institutions to know their customers well through our credit reporting service,” he said. “Meaning that currently, before you get a loan from a bank, the bank can check your credit report to see whether you have any loan relationship and what your payment behaviour. This ensures that banks not only know their customers well, but that they loan responsibly.”
By promoting access to finance, Mr Sothearoath said, CBC has played an essential role in Cambodia’s meteoric economic growth. “Credit Bureau doesn’t only help financial institutions – we also facilitate the development of the economy as a whole,” he said. “Credit Bureau promotes access to finance – this is our main objective. We are trying to give more behavioural information to the lenders to ensure that at the end of the day, you as the lenders have access to that full information – and as a result, can lower your operating cost, and encourage better access to finance as well.”
Mr Sothearoath cited Cambodia’s steady climb through the World Bank’s annual Doing Business reports as testament to CBC’s mission to make finance more accessible to lenders both big and small. In 2012, before the bureau began operations, Cambodia was ranked 98 on the list in terms of credit access. Six years on, the Kingdom has risen to number 20.
For years, CBC’s landmark product has been its individual consumer credit report, which compiles a customer’s payment history into a manageable format to facilitate credit access applications. In addition, CBC has developed several solutions such as portfolio monitoring, personalised K-score, and data analytics to help members monitor their loan portfolio and mitigate risks. Now, Mr Sothearoath said, CBC was working on expanding that service.
“Currently, our core product is the consumer credit report,” he said. “But now we’re building what we call our commercial credit bureau, meaning that in the near future companies in Cambodia with access to bank loans will have their credit reports available by the end of this year.” Most important, though, has been the shift in thinking of Cambodia’s financial sector – and it is this changing mindset, Mr Sothearoath said, that will underwrite the next decade of the Kingdom’s economic prosperity.
“If you look at these financial institutions that we have worked with for six years now as a whole, you do see a behavioural change in the financial sector,” he said. “Previously, they used to check the credit reports just to comply with the rules and regulations in this country – but now they tend to check with the objective of getting more insight into the consumers. So I can say that the demand to know about their customers and data accuracy is happening in this space already.”
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