By Dinali Goonewardene
With present credit levels of Rs. 1.3 trillion expected to increase to Rs. 3-5 trillion within the next few years, the country’s financial sector infrastructure plays an important role, the Credit Information Bureau (CRIB) said yesterday.
CRIB Chairman Priyantha Fernando made this statement at the CRIB Annual Member Symposium. He insisted that as per capita income doubles and the quantum of credit increases, innovative credit becomes important and secure collateral is an issue. Members of CRIB included licensed banks, registered finance companies, specialised banks and leasing institutions. CRIB consists mainly of credit information of all people who have availed themselves of credit from members and at present consists of a data base of five million people. The bureau provides the information for a fee. The bureau has 90 members and supplies 10,000 credit reports daily.
CRIB General Manager Gamini Karunaratne, speaking at the symposium, proposed that changes be made to the format of the credit report. He also suggested a name change from CRIB to something more befitting of its stature.
The accuracy of information submitted to CRIB depends on the quality of information supplied and it is the responsibility of compliance officers to see that information is of a high quality, Fernando said.
Seventy eight per cent of the capital of developing countries is in capital stock with 22% in land. Banks and finance companies prefer land and financial assets as collateral. In the seven months from January to July private sector credit flows were Rs. 210 billion; last year they were Rs. 290 billion. If information in the Credit Bureau was negative, these flows would not take place.
While CRIB allows prospective borrowers to access credit based on their CRIB record, it also facilitates the best rates being given.