Credit information helps people access cheap capital

In order to support credit institutions, on August 25, the workshop "Improving the quality of the national credit information database to meet the needs of credit institutions in business activities and risk management" was held to propose solutions to improve the quality of the national credit information database in Vietnam, fully and promptly meeting the requirements of credit institutions (CIs) and foreign bank branches in business activities and risk management.

In his opening speech, Deputy Governor of the State Bank of Vietnam Pham Tien Dung said that in the process of digital transformation of the banking sector, credit information plays a particularly important role, helping to create a national credit information database for the State Bank to perform its state management function in the monetary and banking sector; support credit institutions in their business activities; and support borrowers in accessing credit sources to meet their living, economic and social needs in accordance with the law.

According to the Deputy Governor, credit information helps credit institutions identify high-risk customers based on the borrower's outstanding debt history and credit card holder's late payment history, avoiding duplication of collateral for many credit contracts at many banks.

Finance - Banking - Credit information helps people access cheap capital — Deputy Governor of the State Bank of Vietnam Pham Tien Dung.

In addition, the more complete the credit information, the more credit institutions can identify potential risks in the production and business sectors in which customers use loan capital to invest, through comparing statistics on investment sectors, investment levels according to credit contracts with the actual needs of economic sectors and corresponding sectors nationwide and internationally.

In addition, the Deputy Governor also added that in the context that the entire banking industry is vigorously implementing Decision 749 of the Prime Minister approving the Program "National Digital Transformation to 2025, with a vision to 2030", many credit institutions have been promoting digital banking services and lending on technology platforms, the construction and development of a complete and accurate national credit information database on a modern technology platform is extremely important.

To achieve this goal, Mr. Dung affirmed that the State Bank will continue to improve the legal framework for the State Bank's credit information activities, inspect the compliance with regulations on credit information reporting by credit institutions, and resolutely handle credit institutions that report incomplete or inaccurate information.

With an overview of the current credit information database, Mr. Cao Van Binh - General Director of the National Credit Information Center of Vietnam (CIC) said that as of August 2023, CIC has stored over 55.3 million customers, an increase of 6.6% over the same period in 2022, accounting for 65% of the total adult population, CIC's information provision growth always reaches 15-20% per year, in the first 6 months of 2023, reaching 31 million reports of all kinds.

Finance - Banking - Credit information helps people access cheap capital (Figure 2). — Mr. Cao Van Binh - General Director of Vietnam National Credit Information Center (CIC).

Accordingly, in 2022, the number of reports provided by CIC to credit institutions grew dramatically with more than 77.7 million reports, an increase of more than 55% over the same period in 2021. Fast and reliable credit information sources have contributed significantly to creating competitive advantages for credit institutions, especially in the current era of digital banking.

According to the General Director of CIC, there is still much room to improve the quality of the national credit information database such as: Expanding information sources outside the industry, expanding cross-border information exchange, applying new technology, investing and upgrading information technology systems; developing high-quality human resources.

Representatives of banks also made recommendations and proposals to improve the quality of credit information databases, meeting business and risk management requirements such as continuing to perfect the legal framework on national credit information databases; building and perfecting a system of high-quality products and services to meet the needs of credit institutions in business activities and risk management.

At the same time, improve the capacity to exploit and effectively use credit information data sources, loan customer information provided by credit institutions as well as CIC's data warehouse; develop data infrastructure and data analysis to support the digital economy and digital finance in Vietnam...

From a banking perspective, Mr. Nguyen Hong Quan, Deputy General Director of TPBank, affirmed that credit information is the basis for promoting comprehensive finance. In fact, many customers have to take out "hot loans" because they lack credit history and cannot access cheap capital from banks.

Ms. Dinh Thi Thai, Deputy General Director of Vietcombank, also proposed that in order to exploit and use credit information sources more effectively, CIC needs to strengthen links with data from other sectors (such as taxes) to provide more accurate information, and at the same time reduce fees so that banks can reduce lending interest rates for customers .

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