Demand for credit information is increasing as the financial market and the digital economy continue to expand, speakers said at a workshop on “Credit Information Services for Better Financial Inclusion” held on Tuesday in HCM City.
Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s HCM City branch, said that “credit information helps commercial banks deal with bad debts better and creates more favourable conditions for customers to access bank loans”.
“Credit information provided by the National Credit Information Centre of Vietnam (CIC) has supported the banking industry, especially commercial banks, to analyse and assess the credit relationship of their customers and commercial banks.
“In the current open economy, an individual or business can open multiple accounts and apply for loans at many banks. If we do not have input information from the CIC, we will find it very difficult to discover the credit relationship of the borrowers so as we can make reasonable lending decisions,” he said.
According to Pham Thi Thanh Huyen, senior financial sector specialist at the International Financial Corporation (IFC), a member of World Bank Group, credit information enables lenders to assess risks more accurately and improve the quality of loan portfolios, and helps banks develop various loan products based on the credit history of customers, reduce credit costs for good borrowers, and others.
Credit information will also help avoid credit information asymmetry and promote credit market development.
Do Hoang Phong, CIC director general, said that CIC had promoted transparency in credit information, improved the quality of databases, expanded coverage of information, provided credit reports of customers, and enhanced universalisation of financial knowledge.
CIC earlier this month officially launched a portal connecting borrowers and credit institutions, which aims to improve the transparency of credit information.
Through the portal, borrowers can easily choose credit packages and register loan needs at the appropriate credit institutions, saving travel costs and time when using banking services.
Credit institutions participating in the portal are introducing credit packages and preferential policies for customers.
They will be able to use the platform to approach borrowers, reduce the time and cost of finding and selecting customers, and ensure openness and transparency, according to Phong.
In the coming time, CIC will continue to research and apply Industry 4.0 technologies, such as AI, big data, and electronic identity verification, to all business processes, he said.
According to CIC’s statistics, the country has 1.053 million enterprises. Some 73.4 per cent of them, or 773,682 businesses, were still unable to access bank loans for many reasons but mainly because of a lack of mortgage assets.
Minh said to access bank loans, businesses must have a feasible business plan, transparent and clear financial reports, and collateral such as real estate, future assets, machinery lines or receivables that the bank repurchases through factoring services. However, even if the enterprise meets these conditions, banks must still check the credit background of the customer.
At the workshop organised by CIC and IFC, delegates also discussed difficulties faced by enterprises in accessing bank loans and solutions to improve access to credit.
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