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Multiple players important for raising the industry bar!

Multiple players important for raising the industry bar!

01 Aug 2011
Apna Paisa


Equifax, a global leader in information solutions, leverages one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology with the objective of creating customized insights that enrich both the performance of businesses and the lives of consumers. Not only this, Equifax empowers individual consumers to manage their personal credit information, protect their identity, and maximize their financial well-being. 

Equifax Credit Information Services Private Limited (ECIS), a joint venture between Equifax and six leading Indian financial institutions (Bank of Baroda, Bank of India, Kotak Mahindra Prime Limited, ReligareFinvest Limited, Sundaram Finance Limited and Union Bank of India), has  close to 200 members. ECIS has seen remarkable growth and has gained the trust of financial institutions across India. Presently it has committed a record base of over 12 crore records.  

ECIS is headed by Mr. Samir Bhatia , a Chartered Accountant who has acquired a wealth of experience over a career spanning 24 years. He is recognized as one of the leading bankers in the country during his stint with leading, successful banks such as Citibank, HDFC Bank and Barclays Bank. He has rich experience and exposure to all facets of retail and commercial banking. Currently Mr. Bhatia is actively engaged with members to build a comprehensive pan India consumer and microfinance bureau with high quality information. 

Speaking in a freewheeling interview with Mr. Harsh Roongta and Bienu Vaghela of Apnapaisa, Mr. Bhatia says, "The culture of usage of Credit Reports is picking up very well. However, in certain segments of financial institutions, the usage is still minimal. To crack this mind set is the real challenge for the Equifax India Head"

What will be the differentiating factors for India from Equifax?    

We have managed to cover a large number of NBFCs, even though it entails traveling to many smaller towns. We have also roped in Co-operative Banks. There are around 22,000 NBFCs in India and that's why we see smaller institutions playing a bigger role. We have developed a data extractor - proprietary to Equifax, which works even on PC based data. The technical team members from banks take the data from there. We want to grow in tier 4 and 5 cities as financial growth is eventually foreseen to come from these cities.  


By involving these banks, you are adding value to your data but are there any major players missing?

We have with us data from almost all major players in India. On one hand we are trying to get the footprint wider, whereas on the other hand we are doing a lot of data gathering and data enrichment, especially that of public sector banks. We do a lot of work on records rejected by us. We have a proprietary tool which automatically filters data to check various anomalies which can then be corrected. In this way we are working directly with members to streamline and secure their data cleansing and contribution processes with our time tested data quality platform used throughout the world.

We have an acceptance rate of 94% which means that large a percentage of data has been corrected between public sector and private sector banks.

What are the other challenges?

Apart from data quality issues, the other issue is that the culture of usage of Credit Information Report is still restricted. We visit various banks' branches and hold training sessions there to apprise them on the importance of credit reports.  


How much do you charge the customer for an Equifax CIR?

We charge Rs. 138/- from the customers and in the case of banks the price is variable and dependent on the volume of usage. 

Mostly history is taken into consideration for negative reasons, i.e. to deny credit. It is rarely used to give better rates or faster sanctions to customers with good credit track records. Please comment.

The credit score is not the only decisioning variable. Banks have other different factors that they take into account on the basis of which they draw their own conclusions on a customers profile. 

How do you see bureau's role evolving from a consumer's perspective?

We believe that number of monthly enquiries that are being made range between 15-20 lacs across the banks. Now this could be possibly one-third of the number of loans sanctioned. Some large lenders are not using credit reports at all. However, we are trying our best to leverage our expertise to help customers form better lending decisions.  

Which types of lenders are not seeking CIRs?

A large portion of the Commercial Vehicle Loan industry is not using credit reports extensively as they have secure asset based products, and people on the ground know their customers really well. Even gold loan players do the same for various reasons. 

Disputes, another area of concern. How are you gearing up for that?

Bureaus play an important role in dispute resolution. We have invested in a sophisticated system which can speed up the process of follow-ups with banks, and hence resolution time. We recognize this as a key area of concern and hence a key responsibility as well.

Now that customers have access to the credit scores as well, do you also plan to provide credit scores to customers Offline and going forward Online?

We are working on developing a score too, and intend on launching it in the near future.

Do you think India is ready for multi credit bureau set up? What challenges as well opportunities do you foresee here?

Of course we are ready for a multi-bureau system. Having multiple bureaus will only enhance the quality of data available  The challenge as already mentioned is data gathering and data quality, which is being worked upon by all bureaus. Opportunities are plenty in a growing economy where living on credit is getting increasingly popular. 

About Equifax>>>

Headquartered in Atlanta, Georgia, Equifax Inc. employs approximately 7,000 people in 15 countries through North America, Latin America and Europe. Equifax is a member of Standard &Poor's (S&P) 500 Index. Their common stock is traded on the New York Stock Exchange under the symbol EFX.