1. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Regulatory and Legal Challenges of Credit Information Exchange in Developing Economies

2. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Who is XDS? (Strengths & Experience)  First and only Black owned Credit Bureau in SA  Self driven, motivated and highly skilled people with many years of credit bureau experience  Data – integrity, accuracy and comprehensiveness  Effective use of advanced technology  Innovation and Flexibility  XDS Credit Bureau projects: UK, USA, Spain, Holland, Italy, Middle East, Uganda, Kenya, Tanzania, Ghana, Nigeria, Australia, South Africa.  Partnership with KPMG

3. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Definition: Credit Bureaus GOVERNING ASSOCIATIONS CREDIT BUREAU LEGISLATIVE ENTITIES Shared Performance Database Data Privacy & Data Protection Laws Data Usage, Disclosure & Security Policies

4. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission  Register, license and regulate credit bureaus, data providers and credit information recipients  Maintaining proper standards of conduct and acceptable credit reporting practices  Regulations and rules for the proper functioning of institutions  Protect the integrity of the credit reporting system against any abuses  Impose penalties for the breach of this act  Define permissible credit bureau activities  Data privacy and protection provisions Typical Legal and regulatory framework for governance of credit bureaux

5. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission  Under the control of either Finance, Justice, or Trade and Industry portfolios  Reserve Bank or Central Banks  Consumer Credit Association  Credit Bureau Association  Ombudsman  Consumer Bodies Typical Legal and regulatory framework for governance of credit bureaux

6. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Consumer Consent  Data Sharing  Credit Grantor  Internal Changes: Application procedures and documentation  Cost  Education and Awareness

7. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Data Sharing Evolution of an Establishing a Credit Bureau  Shared negative data  Data sharing principles  Data guidelines  Negative data contents  Data collation and availability  Removal procedures/guidelines 2Shared positive and negative data 3Development and implementation of scoring models 4Acquiring additional information

8. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission  Legal framework does not exist  No credible associations that have the appropriate authority  No data privacy or protection framework  No consent clauses from consumers for credit providers to supply data to bureaux  Banks are generally only institutions that grant credit –retailers, cell companies, furniture stores not included  No unique individual identification system in place  No formal consumer address structures in place  Reserve Bank or Central Banks wants control of bureaux Legal and Regulatory Challenges in emerging economies

9. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission  Legal and Regulatory Challenges in emerging economies  Banking associations or similar bodies want to own credit bureau  No experience in developing legal framework  Credit environment is not ready and priority is therefore low  No code of conduct for bureaus to operate Legal and Regulatory Challenges in emerging economies

10. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Experience in Uganda  No framework in place  Credit grantors prepared to supply default data  Mainly banks lending on some sort of credit  Credit grantors unable to collect bad debts  Bad debts and fraud extremely high  Very small credit population and very little access to credit  Mainly Micro Lending operations  Consumers exploited  Government very slow to set up legislation  No unique identification  No formal address structures

11. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Experience in Uganda Legislation Status  Took 5 years to draft legislation  Unnecessary complicated and bureaucratic legislation  Under the control of Central Bank – very restrictive  Capital requirements unnecessary high – unlike developed economies where no capital requirements are needed  Major credit bureaux not interested  No guarantee of credit bureau surviving  Does not encourage free market pratices  No movement at all

12. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Experience in Ghana  No framework in place  Credit grantors prepared to supply default data  Mainly banks lending on some sort of credit  Credit grantors unable to collect bad debts  Bad debts and fraud extremely high  Progressive Banking Association  Progressive Finance Department  No unique identification  No formal address structures

13. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Experience in Ghana Legislation Status  Took 2 years to draft legislation  IFC funded and assisted with legislation  Under the control of Central Bank  Capital requirements unnecessary high – unlike developed economies where no capital requirements are needed  XDS operating as a credit bureaux

14. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Nigeria - Challenges  Fraud (Money Laundering, misrepresentation –Identity Theft)  Financial Consumer Empowerment – Economic Growth  Effective credit / loan facilitation

15. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Nigeria – Legislative Requirements  Data Privacy Protection Law  Data Sharing

16. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Roadmap to Establish an effective Credit Environment in Nigeria Roadmap to Facilitate an effective Credit EnvironmentParticipantsActions 1. Establish a Credit Bureau AssociationRelvant Key StakeholdersRegulatory Framework to govern credit bureaus 2. Establish a Consumer Credit AssociationCRIMA + otherRegulatory Framework for Data Sharing Establish Code of Conduct 3. Create committee/ working groupCredit GrantorsCreate Legislative framework Lobby with governmentBureauxfor bureaux to operate bureau to operateGovernment other stakeholders 4. Negative Data SharingCCASharing of Default and Fraud BureauxData

17. This presentation remains the property of XDS (PTY) Ltd and may not be altered, copied or distributed without written permission Thanking you... For your time and your attention.