MANILA, Philippines - After practically saturating the country’s banking system and a number of non-banking financial institutions, the BAP Credit Bureau Inc. (BAP-CB) has successfully penetrated the critical microfinance sector.
The BAP-CB is a product of the Bankers Association of the Philippines (BAP), the trade organization of the commercial banking system. It is a computerized credit information exchange institution that allows members credit-dealing reports on individual and corporate borrowers to combat fraud and bad loans.
With the help of the Rafael B. Buenaventura Foundation (RBB Foundation), the BAP-CB was able to start the Microfinance Credit Bureau project.
“It was the personal mission of former Bangko Sentral ng Pilipinas Governor Rafael B. Buenaventura to establish a nationwide credit bureau, and a sustainable microfinance program,” Leonilo G. Coronel, BAP managing director, said.
The program allows microfinance institutions (MFIs) to fulfill their social mission of poverty alleviation with the help of shared credit information. Presently, the program has enrolled seven MFIs that cover thousands of micro-entrepreneurs nationwide.
These are: CARD Bank Inc., Negros Women for Tomorrow Foundation Inc., Taytay sa Kauswagan Inc., ASA Philippines Foundation Inc., OK Bank Inc., Alon Sa Hirap Inc. and LifeBank Foundation Inc.
The shared list of micro-borrowers coming from the seven members will allow the MFIs to “reform” those with bad credit history after thorough review. The MFIs were the ones that provided the vision, strategic directions and specific business requirements for the project.
“We are just the platform or the data bank that the members provide,” Coronel said. “The bureau only develops solutions, operates the infrastructure and provide the services.”
The project is presently under pilot testing and it will be reviewed in September this year.
Meanwhile, the BAP-CB membership list has reached 140 sectors including three government financial institutions, 50 rural banks, 21 thrift banks, 14 credit unions and cooperatives, 28 commercial banks and universal banks (the original members), and 24 other non-banking financial institutions.
So far, the list reached 4.5 million names of individuals and institutions, and the average inquiries are 15,000 a day. The historical peak in a single day reached a little over 30,000. A P5 fee is charged for every inquiry.
A Negative File Information System (NFIS) has over millions of records of credit cards cancelled due to mishandling, current accounts closed by the banks due to improper handling, loans classified as foreclose, litigation and written off accounts and court cases related to sums of money provided by the Credit Management Association of the Philippines (CMAP).
All inquiries by members, including the NFIS, can be accessed through the Internet, and inquiries are electronically processed in practically real time from receipt of inquiries.
Other services are the Real Property Database System (RPDS), an electronic compilation of fair market values of real estate properties held by banks and financial institutions as loan collaterals, foreclosed/dacioned (dacion en pago) assets, among others. Through this system, members would be able to electronically access and share in real time fair market valuation data of real estate properties.
The Titles Caution List Database (TCLD) is a web-based service that gathers and maintains information about spurious, non-existent, or otherwise questionable land titles. With this system, members have a first line of defense against spurious titles.
Proper enrollment by members to the systems is, however, necessary.
The presence of the BAP-CB more than compensates for the continued absence of the Central Credit Information Corp. (CCIC), formed by the implementation of the Credit Information System Act (CISA) in 2008.
Sixty-percent of the corporation will be owned by the National Government through the Securities and Exchange Commission (SEC) while the remaining 40 percent will be shared by the private sector.
So far, the formation of the mandated entity has not been formed despite the fact that the private sector representatives have already invested in the government-led credit information bureau.