One of the unfinished tasks in the banking sector was to set up a
Private Credit Bureau. In this case Bank Indonesia was expecting this Private
Credit Bureau would be established by 2014 so the banking sector could use
their services.
Most probably the initiator of this idea was a foreign company,
collaborating with local bank association. Based on discussions with the
related parties, BI was optimistic that the PCB would start operation by 2014.
There were two models of operations, they could market their services by way of
door-to-door or collaborated with banking associations like Perbanas.
As know, BI had issued Bank Indonesia Regulation [PBI] no 15/PBI/2013
dated February 18, 2013 on Credit Information Management Body [LPIP]. Finally
PCB was permitted by BI to operate in Indonesia as banking and financial
institutions needed derailed information on debtors.
The way it had been since 1975 BI had procured information on credit business
for the purpose of credit pipelining by banks as well as to execute BI’s
assignments. The information on credit was accessible for free by banks or
multi-finance services through Debitor Information System [SID].
However, with the so many BI assignments and development of national
finance industry, SID was no longer adequate for rendering all information
service needed about debitors. Therefore the role of PCB was expected to
contribute to detailed data compilation and track-record of all candidate debitors.
So far through SID all banks including People’s Credit Bank [BPR] and 18
financer companies were doing BI check up before extending credit or financing.
One of LPIP plus points against SID that it was able to present a longer track
record of debitors.
Today there were already some private credit bureaus who informally
stated their interest to BI or Perbanas. Their country of origin were the USA,
Italy, Singapore, Japan, South Korea and some East European states. However, in
that regulation BI obliged private credit bureaus to acquire the status of
Limited Company [PT] and the maximum shares ownership for each party was 51%.
Foreign ownership was permissible but not directly as they had to
engaged a local partner, while the stipulate paid up capital was at least Rp 50
billion. As they would manage data in Indonesia and do business in Indonesia,
it was regulated that 50% of the Board members must be Indonesians.
Credit bureaus in Indonesia today were of two types, i.e. a limited
company based on Indonesian legal system and Credit Information Bureau which
was part of BI. Both provided information on financial historical data of
debitors personal or company with the objective of helping creditors to make a
decision in extending credit.
The two Credit Bureaus obtained credit information from financing
institutions, banks, finance associations and other financial institutions
which contained credit track record of customer of candidate customer. The
information was used by the banks or financing agencies in evaluating
credibility or credit history of customers or candidate customers.
However, the information obtained from the Credit Bureau was only part
of the entire process of decision making in credit extension by bank or
financial institution which might be viewed differently by every creditor.
From the perspective of the Central Bank, the policy for banking
industry sector development was aimed at establishing a banking system which
was healthy, strong and efficient toward a stable financial system which would
eventually help to develop national economy the sustainable way.
From this point of departure, in the effort to promote high economic
growth through credit pipelining, since 2006 BI felt it necessary to support
the intermediary role of banks through the formation of Credit Information
Bureau [BIK].
BIK’s main task was to collect and store data of fund procurement and
financing and in the end to distribute as credit information further known as
Historical Individual Debitor’s Information [IDI]. This historic IDI could be
benefited by the financial institutions which were BIK member [banking and non
bank financial institutions/LKNB] and the general public, personal or company.
To the financial institution, the obtained Historic IDI was expected
among others to know the credibility of debitors as candidate recipient of fund
and also to know whether of not the candidate debitor was having any financing
facilities from other institutions.
The information would help the financial institution in making analysis
in the financing process so they could smoothen the process of fund procurement
as well as to exercise the risk management, among others to prevent failure of
payment of loan extended and to prevent fraud.
To the public, the Historic ID obtained was expected to bring positive
educational impact on debitors that they be responsible for payment obligations
of credit, and at the same time to exercise control over the truth and accuracy
of data presented by the financial institution to BI.
Some points were to be observed in this case. Firstly, the authority to
decide to extend credit or financing was the policy of banks or the related
LKNB. Secondly, the truth and accuracy of Historic Information IDI was the
responsibility of BIK member financial institutions which reported the data.
Thirdly, all of the legal consequences that arose in regard to use of
Historic IDI for the benefit of BIK member financial institution, which were
not in accordance with the rules were fully the responsibility of the related
financial institution. Fourthly all of the legal consequences in regard to the
use of Historic IDI by the public was fully the responsibility of the related
party.
In principle, there were some benefits for the related parties of the
information in the Credit Bureau. Firstly, benefit for the creditor, i.e. to
help to speed up the process of analyze and decision making in credit extending;
with comprehensive and accurate debitors information could lessen the risk of NPL in the future; to lessen dependency of
creditors on conventional guarantee to minimize the risk of NPL and to enhance
efficiency in operational financing.
Secondly, the benefit for creditors, i.e. to shorten the time frame to
obtain credit approval; and for new customers, particularly UMKM small business
would have boarder access to creditor by relying on company’s financial
reputation without depending on the capacity to present guarantee.
Thirdly the benefit for the Government and the public was to help manage
the national credit system including the controlling aspect to expand and ease
access for UMKM to the banking system; to enhance the principle.
Business News - April 01,2013
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