“First Year Anniversary of the Credit Bureau in Cambodia”
By Mr Garry Wood – Chief Executive Officer
Credit Bureau Cambodia
Phnom Penh, March 28, 2013Ladies and gentlemen and distinguished guests in the audience,
It is with great pleasure that I welcome you here to our first anniversary business briefing update for the Credit Bureau Cambodia. As my esteemed colleagues from the National Bank of Cambodia and the IFC have explained today we have achieved a significant amount in a very short time thanks to the efforts of those of you here today.
When I look back on our journey to date I find it hard to believe that we have achieved so much in such a short period of time, just over one year ago I stood in front of you explaining what a credit Bureau was and why we even needed a credit bureau in Cambodia. Now some 12 months later it should be clear to all of you in this room how a credit bureau impacts the Cambodian economy and banking sector.
Of course this journey was not a simple one – Well over 1000 people had to come together and agree that we would be successful in our mission before we began. Over the past 12 months there have been hundreds of people involved in the project from lawmakers in the government and regulators at The National Bank all the way to the technical teams implementing the software and the training teams tirelessly training thousands of operators how to accurately use the credit reporting software.
Last year I had to explain why the Credit Bureau use was necessary and mandated by Micro Finance Associations and banks alike, many of the MFI’s questioned why it was necessary for an MFI to run credit reports when their mission was to help “the poor people” – Of course this is also the mission of the Credit Bureau.
With healthy and transparent lending and credit policies Cambodia is more appealing to external investors, capital in the way of loans are easier to come by and of course those people that are already in debt are protected from becoming more over indebted – When all of these checks and balances are in place we can all then aim at reducing poverty in Cambodia and making capital easier to come by for everyone.
With a credit bureau comes more responsible lending, faster processing and easier access to finance for all. It is with credit to everyone here that we have managed to make this a reality for the Cambodian economy - Recently in a world bank report the Kingdom of Cambodia increased its ranking position on the world stage dramatically – this was due at least in part to the implementation of the Credit Bureau, what is more is that since this report the number of donor organisations that we talk to on a weekly basis has increased as the number of non performing loans has started to drop.
To show you what I mean here is a graph of the number of credit enquiries run over the past 12 month period – you will see that they have increased from 6000 a month in 2012 to 158,000 a month in 2013.
The MFI sector obviously pays much less for each credit report – in fact I am pleased to tell you that the MFI charging rate for Credit Reports in Cambodia is still the lowest priced credit report anywhere in the world. Luckily Cambodia certainly has volume in its MFI sector – Over the past 12 months the credit bureau has generated XX number of MFI reports.
And of course the banking sector continues to grow – in the past 12 months the volume of credit report requests from banking organizations has increased from XX at the start of 2012 to XX by the end of 2013.
If I quickly flip back to this slide you will see that the sustainability of the credit bureau is a key component of being able to meet the goal of reducing poverty, without a sustainable credit bureau we simply don’t have the opportunity to achieve our goals.
I am pleased to report that the Credit Bureau is stable, sustainable and operating well, of course in order to ensure our sustainability we can not just stand still we must introduce new products and services and expand our footprint.
So where are we going next – what can you expect to see from the credit bureau in 2013 to 2014 moving forwardOne of the first things you will see if for us to expand our credit reporting functions into other key markets this year – mainly into telephone and utility companies that will allow us to consolidate billing data into the credit reports
You can also expect to see a lot more training and education from the CBC over the next 12 months – as we increase our focus on providing knowledge transfer for Basel and Basel II compliance into individual entities credit & loans departments.
We are also working on developing a number of criteria to bring about a credit scoring system that will provide me actionable data to credit departments allowing them to look at multiple elements about the customers borrowing behavior
Over the next 12 months you will also see the CBC introducing decision support software that will also help credit departments speed their credit decisions and partially automate existing processes that are currently heavily manually intensive. This will further reduce the speed required to issue new loans to consumers.
All of these activities and future plans will of course help us to fulfill the vision of the National Bank of a compliant lending infrastructure – and as credit reports become a portable collateral for the consumer that means easier access to a more competitive finance market – I personally have been delighted to see the first number of unsecured loans being offered to people basd on their credit record alone. Now we have to think about how we communicate this to the people in Cambodia.
When we launched the Bureau in 2012 much of our focus was on announcing the presence of the Bureau and the change in the law, in 2013 our communications will focus much more on awareness of the Credit Bureau and its role in our economy.
Of course it is a fact that the average consumer doesn't’t connect very well with banking jargon or complex credit information – so in 2013 the CBC will be sponsoring a number of high profile social campaigns that benefit our society with the dual function of acting in a socially responsible way whilst at the same time increasing our awareness with Cambodian consumers.
The CBC will be sponsoring Happy Football, which helps run children's football and physical education programs in a number of under-privileged schools and orphanages in and around Phnom Penh. We together with our Media Agency are sponsoring the CBC charity cup that will be used to continue this program in the community.
In 2013 Cambodia will send a team of youth players to Poland to play in the homeless world cup – we will be sponsoring the Cambodian teams journey to Poland.
For those of you that are not aware the Government of Cambodia is strongly dedicated to reducing the number of deaths and injuries occurring in our country due to motorcycle crashes. Helmets are a simple and effective solution, and protecting our youth from the dangers of the road is essential to ensuring our country’s bright future.
The CBC will be sponsoring a platform called “LIDS for KIDS” that will be helping fund crash helmets for children that ride to school on the back of a motobike and otherwise could not afford them.
Of course crash helmets go some way to protecting children – however studies have showed that road safety education at a young age is the most effective way to reduce road fatalities – that is why the CBC will also be sponsoring children's road safety education in the classrooms so children can then inform their parents as so often happens!
And lastly but not least the CBC will also be sponsoring an education program for young children and a charity called A New Day Cambodia, for those that do not know this organisation they take young children from the garbage dump and pay their families so the children can attend School – The new day centre then finds sponsors for the child's education and vocational work experience
Here are just some of the children from A New Day Cambodia today – as you will see this is a long way away from scavenging on the rubbish dump. These children will be having a new roof on the centre in the next couple of weeks so they can play and study out of the sun, effectively increasing the outside usable space by 100%.
We are also working with the centre to develop an education program that will help to fund those children with good grades and interested in studying banking and finance with the opportunity to do so – something which just a few years ago would never have been possible for one of these children from the rubbish dump.
This of course is all good news – The credit bureau is running and running well – We will continue to expand our product offerings and education over the next 12 months and we will also be increasing our awareness in Cambodia by sponsoring and supporting a number of good causes that actually improve the lives of people.
And as the last speaker for today again I would like to re-iterate that it is a team effort including everyone's effort in this room, an effort that everyone should be applauded for and be very proud of.
I very much hope everyone here will be able to join us for our celebrations this evening and I very much look forward to working with all of you over the next 12 months. I will now hand over to Siphana for his closing comments and will look forward to answering any questions you may have during the break. Thank you!