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Indonesia’s first credit bureau to be launched in '15
Publication Date : 13-08-2014
Credit-rating agency PT Pemeringkat Efek Indonesia (Pefindo) is set to launch a credit bureau, the Credit Information Management Bureau (LPIP), in the fourth quarter of next year.
The new bureau, the first of its kind in the country, will provide credit-rating information about individuals to lenders and other financing bodies.
Pefindo president director Ronald Andi Kasim said on Tuesday that the new bureau would become Pefindo’s subsidiary under the name PT Pefindo Biro Kredit.
“The bureau will be similar to those in countries like Japan, Malaysia, Singapore, South Korea and the US, which provide credit-risk profiles of people,” Ronald said.
He said that Pefindo Biro Kredit would assist banks and financing institutions by providing them with credit-risk profiles of their potential debtors to avoid non-performing loans.
Ronald added that Pefindo Biro Kredit would determine people’s credit ratings based on data obtained from the Financial Services Authority (OJK) and several other financial institutions. The scale ranges between 0 and 1,000, with a higher score reflecting a better track record.
“We will provide ‘credit scores’ of prospective borrowers so that banks and financing institutions can grant lower interest rates to those with higher credit scores and higher interest rates to those with lower credit scores,” he said.
The information provided to the financial institutions would also help to prevent any fraud or scams, as each piece of information would be matched with a prospective borrower’s profile identity and debt track record, he added.
In its preparation to establish and operate Pefindo Biro Kredit, Ronald said, Pefindo would be working with a number of financial institutions and associations, which would also become the bureau’s shareholders.
Pefindo Biro Kredit would ensure its independence in accordance with Bank Indonesia (BI) Regulation No. 15/1/PBI/2013 on credit bureaus, he said.
The regulation includes a number of requirements for any entity that sets up a credit-rating bureau; namely, the founders of a credit bureau must be an institution and not an individual; the bureau must be run under a public-private partnership (PPP) model; the maximum shareholding for a single entity is 51 per cent, and the maximum level of foreign ownership is 20 per cent.
Ronald said that Pefindo Biro Kredit would be 51-per cent owned by Pefindo; 23.6 per cent by state-owned pawnshop PT Pegadaian; 10 per cent by PT Cigma Cipta Caraka — a subsidiary of state-owned telecommunications firm PT Telkom; 10 per cent by the Indonesian Financing Firms Association (APPI), and 5.4 per cent by PT Credit Information Corporation (CIC) Indonesia — a subsidiary of the CIC, Japan’s largest private credit bureau.
Ronald said Pefindo would spend between 80 billion billion (US$6.8 million) and 100 billion rupiah to establish Pefindo Kredit Biro, substantially higher than the minimal capital level of 50 billion rupiah as stipulated by BI.