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. IBERIA Spain Consumer #1
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
INDIA Consumer
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
Accurate and timely data collection by MFIs on prospects and borrowers from the credit bureau member institutions which is Data supplied by the MFIs to credit bureaus on a regular and timely basis.
Collation, correction and standardization of the data and ensuring that the data is complete, searchable and standardized
Credit Bureau Products that are accessible, accurate and usable across the lifecycle of a loan for better decision making resulting in more and better quality assets
Key Updates
Membership : 341 (MFI’s 95)
Data 200 million + ( MFI 62 Mn)
4.28 mn enquiries processed in FY
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
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. Our proposed products for MFIs
LAUNCHED PRODUCTS
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
Name
DOB ID
Address
Phone
Zip
Age

7. Key Challenges and the road ahead
CURRENT GAPS
WHAT NEEDS TO BE DONE
Use of credit bureaus
Early in the lifecycle on effective use of credit bureaus in decisioning – more information vs accurate information
Use of data to make differential decisions rather than classification into black and white
Score/Risk based pricing
Best practice transfer from banking
Risk ranking of bureau scores
Technology
Internet access in remote branches
Limited number institution using loan origination systems and automated decisioning systems
Mobile Reports
Work with bureaus and software providers to create low cost solutions for LOSs and end to end decisioning systems
Data
Data Capture
Low understanding of the importance of data quality and accurate data capture
Data Submission
Regular & timely submission of data
Ensuring complete submission of data
Accurate reporting of changes in the data
Continuous changes in branches and account nos.
SHG data not available in the data submission
Investment in technology to ensure the branches are connected and there are basic checks in place on data capture
MFIs to continuously work for improved data collection
Sharing of SHG data by the banks and state governments (SHG/MFI overlap 80%)
Awareness of data quality issues and sensitization of the teams to the importance of accuracy of reporting.
Training and awareness
Awareness of Information provided by Credit Bureaus and its importance in credit decisions for MFIs for risk management & regulatory compliance
Partnership with Bureau, MFI associations and institutions like IFCI for creating awareness on credit bureau importance & need for financial inclusion

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