Rural banks in the Philippines this month are gaining access to a credit bureau that already assists commercial banks in the country in their credit card issuing, according to the Credit Bureau Inc., a nonprofit organization formed by the Bankers Association of Philippines.
The bureau manages a database that covers 4 million accounts and provides information related to credit card and other loan details, such as unpaid debts and bounced checks, a spokesperson for the bureau tells PaymentsSource.
“Almost all commercial banks in the country subscribe to this information system for their lending practices,” he adds. “However, rural banks have not done so.”
Rural banks instead were looking at a new central credit bureau that was to be formed under the Credit Information System Act of 2008, but that did not occur.
By gaining access to Credit Bureau’s information, rural banks can avoid issuing credit cards to borrowers who may already have credit from other banks, thus, potentially averting client over-indebtedness.
To encourage rural banks to subscribe to the database, the bureau has cut the 11 peso (25 U.S. cents or 18 euro cents) fee in half for each inquiry and has removed the upfront peso subscription fee, the spokesperson says. The upfront fee was not disclosed.
Twenty rural banks already have joined the bureau, and more are expected to join by the end of this month, the spokesperson says.
Bankers Association of the Philippines is a nonprofit organization established in 1949 to represent the interest of banks throughout the country. Members include Asia United Bank Ltd., Development Bank of the Philippines Ltd. and Union Bank of the Philippines Ltd.
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