Over the last five years, the number of rural banks utilizing the Bankers Association of the Philippines (BAP) Credit Bureau’s Negative File Information System (NFIS) has grown almost five-fold with seventy-seven (77) rural banks now enrolled and fifty-one (51) rural banks actively using the system. There has also been an almost nine-fold increase in the number of credit inquiries by rural banks.
There are several reasons for the dramatic increase in the number of rural banks enrolled in the BAP-CB and the increase in the number of inquiries. One factor is the reduced fee to both enroll and access the system. Rural banks may now enroll in the BAP-CB for free and only need to pay a PhP 5 fee per credit inquiry. BAP-CB also provides free training for all subscribers. The only requirement is that all subscribers share and update their negative files with the NFIS.
Another factor is the importance that rural banks are beginning to place on having access to a functioning credit bureau. It is widely recognized, that access to a credit bureau is one of the important tools that could improve the analysis of potential clients credit histories and assist in better managing multiple borrowing and over indebtedness. The effort to encourage the expansion of the credit bureau among rural banks also benefitted from the leadership and active support of RBAP Presidents Ms. Ma. Corazon Miller and Mr. Ian Pama over the past two years.
In addition, Mr. Leonilo ‘Topper’ Coronel, Managing Director of the BAP-CB, shared that some commercial and thrift bank clients, with poor repayment histories, are increasingly attempting to borrow from rural banks. Tapping the vast database of the credit bureau’s NFIS is one of the best ways that rural banks can obtain a better picture of the credit history and potential risks associated with these types of borrowers.
Citing the benefits of reporting delinquent borrowers to the NFIS, Mr. Manuel Batallones, BAP-Credit Bureau Manager, underscores the fact that borrowers with delinquent loans with rural banks who attempt to obtain additional loans from other banks, including commercial and thrift banks, would be flagged in the NFIS. Since all commercial and thrift banks now access the NFIS and normally require all outstanding delinquent loans to be repaid first, rural banks naturally benefit from sharing these accounts as a way to improve their loan collection efforts.
BAP-CB also recently enhanced their services to better support microfinance credit institutions in the Philippines. The new system called the Microfinance Data Sharing System (MIDAS) has been pilot tested on Panay Island and is being rolled out to other parts of the country.
The Rural Bankers Association of the Philippines – Microenterprise Access to Banking Services (RBAP-MABS) supported by USAID/Philippines, continues to actively support efforts to broaden the access to and use of the credit bureau services for all rural banks. The BAP-CB provides rural banks with reliable and extensive credit histories of hundreds of thousands of clients. While rural banks wait for the implementation of the Credit Information System Act (CISA), BAP-CB is the best and largest database that rural banks can actively start to use.
So what are you waiting for!