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Building an Effective Credit Information System – The Credit Bureau Perspective

Building an Effective Credit Information System – The Credit Bureau Perspective. Sriram Kalyanaraman, Director Sales and Product Development Equifax Credit Information Service, Mumba i Aug’12. Global Overview. RUSSIA Consumer #1. UNITED KINGDOM Consumer #2 Commercial #3. CANADA

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Building an Effective Credit Information System – The Credit Bureau Perspective

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  1. Building an Effective Credit Information System – The Credit Bureau Perspective Sriram Kalyanaraman, Director Sales and Product Development Equifax Credit Information Service, Mumbai Aug’12

  2. Global Overview RUSSIA Consumer #1 UNITED KINGDOM Consumer #2 Commercial #3 CANADA Consumer #1 Commercial #2 UNITED STATES Consumer #1 Commercial #3 IBERIA Spain Consumer #1 Portugal Consumer #1 INDIAConsumer MFI ANDEAN REGION Peru #1 Uruguay #1 El Salvador #1 Honduras #1 Ecuador #1 BRAZIL Commercial #2 Consumer #2 CHILE #1 ARGENTINA#1 • Equifax is a global information solutions company • 113 years history of leadership in credit information services worldwide with a full suite of credit solutions • Successful track record and reputation serving global markets across 17 countries • Largest US Credit Database and # 1 ranking in most markets where Equifax does business • Proprietary databases containing information on over 300 million consumers and 100 million commercial entities worldwide and average of over 10 trade-lines per consumer 2

  3. The Microfinance Exchange - India • Equifax Services • Unique search / match algorithm for MFI data • Ability to do phonetics based name match Leverage family details Reports provide delinquency string • Future Products • Industry Reports • Mobile Reports • Scores • Key Updates • Membership : 341 (MFI’s 95) • Data 200 million + ( MFI 62 Mn) • 4.28 mn enquiries processed in FY 2012-13 • Access Platforms • Web based access using proprietary tool. • Online batch and system readable format • Output available in multiple formats • Risks and Challenges • Over-indebtedness and multiple lending • Pressure to sustain operations for incumbent players • Limit on total loan / exposure of a borrower • All Institutions not sharing data • SHG data not available • Data Initiatives • Built a data submission tool for the industry • Ability to accept data without ID information • Built database using MFI specific data elements such as joint liability group credit attributes Source: MFIN, RBI, Mint

  4. LAUNCHED PRODUCTS Our proposed products for MFIs Credit Information Reports Enables Member to determine credit worthiness of a customer & help meets regulatory compliance - No. of active loans, total outstanding balance across MFIs, past due status Portfolio Review Assessment of portfolio quality & behavior of existing customer across all lenders. A powerful tool for regular monitoring of portfolio accounts for proactive risk management FUTURE PRODUCTS- Evolved MFI Bureau Usage Portfolio Alerts Provides a series of credit based triggers to pro-actively determine a set of existing customers which are showing either improvement or deterioration in financial status or are looking for fresh credit in the market Comprehensive report that provides valuable insights on industry trends sliced and diced across various dimensions such as geography, customer profile and other parameters; An effective tool to benchmark current operations and guide future business growth Industry Reports Scores Risk indicators that can be used for quick and accurate decision making which is predictive and objective which reduces the dependence on internal criteria and optimizes implementation of learning from market data. Leveraging the deep product suite, new products will be rolled out based on market needs and readiness

  5. Illustration of Visual Analytics ILLUSTRATION ONLY

  6. Key Enabler/Challenges: Search & Match • Complete data submission • Ensure all credit institutions participate in the bureaus • Ensure that all institution submit complete data • Data Quality • Address • Address Format is not standardized • Regional Language References • Name • Vary from region to region • Influenced by religion and caste • Many instance of names with just Initials • ID Population • Not every one has to have one • Socio-Economic Condition • Joint Family • Highly populated

  7. Key Challenges and the road ahead

  8. Telephone & Utility Exchanges Consumer Surveys How does the future look? Consumer Demographic Data Identification& LinkingData Consumer Credit Database Fraud & Authentication Data Tri-bureau Data • Monthly Updates: • 15,000+ Data Providers • 1.8 billion Trades • 110M Collections • 350K+ Bankruptcies • 800K+ Judgments/Liens • 12M Address Changes • 144M+ Online Transactions Employment Data Unique Business Models Securities Compliance Data Marketing Response Data Address Hygiene Data Telephone Number Data Commercial Exchange

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