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Pioneer - a new vision

Pioneer - a new vision

Vietnam - a nation with a population of nearly 90 million people and more than 480,000 small and medium enterprises (SMEs). According to a recent survey, only about 5% of the population and 30% of SMEs have credit transactions with the Bank. This is a very low rate compared to other countries in the region (such as in Thailand and Malaysia with 70% and 80% of the population respectively). One of many reasons why Finance institutions (FIs) have not been able to expand their customer base is that they cannot collect enough reliable information to make credit granting decision as well as managing credit risk among this large number of customers.
Pioneer - a new vision
An international study has proven that: Although there are many factors that affect how a nation responses to the economic crisis but if a country does not have Credit bureau or a credit report system (such as Greece), it would face more difficulties than those with established Credit bureau. Global crisis has been causing major damage on most economies in the world. Therefore, besides the State Bank’s Credit Information Center, Vietnam needs a private credit bureau to support the Government, the people and FIs.
Arise from that fact, with the desire to collect, provide credit information of individual customers and SMEs to FIs and contribute to the development of retail market in Vietnam, Investment joint stock Company PCB official established in July, 2010, aiming to build and operate the first world class Credit bureau in Vietnam.
It goes back to May 2007 when the company founder thought of the idea. At that time, Vietnam still has an underdeveloped consumer credit market. The banks was trying to expand this market by offering a wide range of comsumer products such as home loans, car, home repairs, student loans, etc., especially after Vietnam join the WTO. With the increased demand for comsumer credit, the need for consumer credit information also grew. It is a potential market for private credit bureau (PCB). In November 2007, PCB Investment Joint Stock Company was jointly founded by 11 local leading banks, with the goal of establishing a full fledged PCB, collecting both positive and the negative information from the financial institutions (FIs) and non-financial institutions. The data collected by PCB, shall be shared equally among shareholders. Organizations that provide data to PCB can obtain PCB’s credit reports while those that do not provide information cannot. With PCB, the founders believe that the retail banking and consumer credit market will become prosperous since PCB will act as a bridge to help individuals, SMEs accessing to credit sources in a more efficient way.
In addition, the banks are benefactors because PCB can provide information on their borrowers’ payment history (to identify those with bad payment habit), thereby helping banks reduce credit risk and reduce non-recovered bad debts. On the other hand, borrowers will also receive benefit. Those who have good credit history will be provided with a more favorable interest rate with less requirements, or even without collateral, based on good payment history provided by PCB.
However, before transforming this idea into fact, PCB needs a legal framework for credit information operation. Finally, on Feb 12th 2010, the Prime Minister issued Decree 10/2010/TT-NHNN and on June 25th 2010, The State Bank issued Circular 16/2010/TT-NHNN, guiding the establishment and operation of a PCB. Thus, the legal environment for PCB to operate in Vietnam was officially created.
Implementation …
Besides the positive evaluation about the market potential and legal environment, Board of Directors of PCB have also anticipates the challenges for a "pioneers" in a brand new field. PCB needs to be able to quickly provide products that meet the needs of banks, concentrate resources for market development, and seek a strategic partner to obtain cutting edge technology and gain experiece on credit information business. With the support of the International Finance Corporation (IFC), after two years of international bidding and negotiation, PCB selected CRIF from Italy to become its strategic partner and own 20% of PCB’s charter capital. He also committed to transfering technology, knowledge and experience to PCB.
The selection of this strategic partner is extremely important and later proved to be one of the most successful deals of PCB. Mr. Carlo Gherardi, Chairman and CEO of CRIF confirmed: "CRIF is honored to join with PCB in building the first PCB in Vietnam which is able to provide both positive and negative credit information. CRIF’s experience in delivering similar solution in many countries around the world makes us confident that FIs and borrowers in Vietnam will receive the same benefits. On the one hand, with full credit history information, the Vietnamese people and businesses will have easier access to credit easier and to more favorable credit conditions. Banks and FIs in Vietnam will manage their customers, and prevent risk better. With over 20 years of experience and impressive successes on the international credit information market , CRIF has many favorable conditions to support PCB in successfully deploying the first Private Credit Information Center in Vietnam, to connect and provide diverse, reliable products to FIs in Vietnam, to contribute to the expansion and development of retail banking market, to support SMEs, private groups and individuals in accessing to credit, and over all to give the private sector in Vietnam a boost.
… And success
So far, after more than one year of operation, PCB has acomplished certain achievements. 10 banks have signed to join PCB system and they will receive the benefits like the founders had thought up. Many contracts and cooperation agreements have been signed. In the future, when the number of clients increases, there will be more organizations and individuals receiving benefits from PCB. Many people will have access to credit. Banks’ portfolio will be more secured when they have the most accurate and timely information provided by PCB. The government will also feel at ease when banks and the people are protected from bad debts in a sustainably developing and tranparent market.


Contact PCB
Vietnam Credit Information Joint Stock Company

Headquarter: 16th Floor, LPB Building, 210 Tran Quang Khai, Trang Tien Ward, Hoan Kiem District, Hanoi.
Hotline:+(84) 24 3936 9558
Representative office: 15th Floor, A&B Tower, 76A Le Lai Street, Ben Thanh Ward, District 1, Ho Chi Minh City.
Tel: +(84) 24 3936 9558
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

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