Non-Banking companies Launch New Credit Register
Leasing and sales finance companies have established a new credit register in the Slovak Republic. The Non-Banking Register of Client Information (NRKI) will serve to assess the credibility of clients and to reduce the risk of occurrence of unpaid credit. This was announced at the today’s press conference by representatives of the eight founding companies of the Non Banking Credit Bureau (NBCB), and the operator of the Register, the Slovak Credit Bureau (SCB). The launch of the Non-Banking Register comes less than four years after the Joint Register of Banking Information (SRBI) officially began operating in Slovakia
“The launch of the Banking Register four years ago was very successful. At present, it is used by fifteen companies which account for 99 per cent of the retail market and it contains 78 per cent of all credit applicants. This is why we are also trying to transfer the Register’s advantages and assets to the non-banking sphere,” explained Ján Budinský, Director of SCB, which provides services linked to the operation of the two registers and is at the same time responsible for their future development.
The NRKI represents a secure database of information on clients who are in an installment-type relationship with a membership leasing or sales finance company. It contains both negative data such as deferred payments or long-term unsettled credits (data which are of significant importance for reducing the risks to financial institutions) as well as positive information which allows credible clients to acquire financial products more quickly and easily.
“The launch of the Non-Banking Register will significantly influence the market in the sphere of leasing and installment sales and will reduce the risks resulting from insolvent or fraudulent conduct of some customers. It should also become a tool to prevent the vicious circle of paying off credit with more credit, which affects an increasing number of people,” said Marián Tibenský, Secretary General of the Association of Leasing Companies.
The Non-Banking Register will allow its members to create a picture of every client’s obligations, in order to better asses whether a client is capable of paying back the next potential credit. Today, eight companies are members of the Register: ČSOB Leasing, BOF, Volkswagen Finančné služby, VB Leasing SK, Tatra-Leasing, UniCredit LEASING Slovakia, GE Money and Consumer Finance Holding. These companies, who have approximately a 75 per cent share of the leasing market and a 50 per cent share of the installment product market, are co-founders of the NBCB, which operates the Non-Banking Register.
“The main advantage of the Non-Banking Register to its members is the reduction in risk from unpaid credit. Experience from abroad also shows that financial institutions in the countries where similar registers operate, achieve almost 10 per cent more approved agreements. This means that the positive register provides access to credit to, among others, those people who could not have obtained it due to some kind of defaults made in the past,” said Ján Krišťák, Chairman of the NBCB.
Incorporating information in the Register is dependent on a client’s agreement, in accordance with the Protection of Personal Data legislation. From a technical point of view, the data are secured against every kind of misuse and the membership companies can use them solely for an exactly defined purpose – to assess the credibility and payment history of a particular client. Every client can check the data held on him or her in the Register through the Register operator’s client center.
The operator of the Non-Banking Register, the NBCB, is the administrator of the database and also the company that deals with inquires from leasing and installment companies and provides them with credit reports. It also operates the client center and ensures that the data processing is carried out in accordance with legal provisions.
Apart from the NBCB, the SCB and the Italian company CRIF participate in the project. The SBC looks after future project development and provides several services linked to the Register’s operation. CRIF, on the other hand, provides its information system, EURISC, to the project and carries out data processing. CRIF has operated a similar register in Italy for more than 18 years, which is used by several hundreds of financial institutions.