The Credit Bureau Cambodia (CBC) – a provider of credit information and other credit reporting services – is developing commercial credit reporting to allow CBC members access to the credit history of commercial enterprises.
To date, the CBC has only produced consumer credit reports, which give the personal credit history of individual borrowers.
The new product will make it easier for lenders to identify companies with outstanding debts, giving them a better understanding of their clients creditworthiness and repayment capabilities.
According to Oeur Sothearoath, CEO of the CBC, the new product is set to go on trial by end of the year and is scheduled to be fully functional by the first quarter of 2018.
The CBC’s commercial credit reporting has been in the works for nearly two years, and is being developed with the assistance of member banks and financial institutions.
“By introducing commercial credit reporting, we will help banks and MFIs analyze the credit information of commercial entities, so that lending is done efficiently,” Mr Sothearoath said.
Neav Chanthana, deputy governor of the National Bank of Cambodia (NBC), said on Friday that expectations for the new product are running high.
“We expect to see it in operation by next year, and hope that it will help modernise the current financial reporting system, and provide new opportunities and advantages to all credit information consumers,” Ms Chanthana said.
Chea Phalarin, CEO of Amret Microfinance, expected the new system to limit the risk of borrowers defaulting on their debts.
“It is a very important step. Presently, banks and MFIs don’t know the credit background of their clients and their current debt situation,” Mr Phalarin explained.
Mr Phalarin stressed the new product will enhance transparency, a situation he describes as a double-edge sword as it has the potential to enhance trust when companies seek potential partnerships, while simultaneously allowing your competition access to potentially sensitive information.
Working with 141 financial institutions in the country and more than five million borrowers, the CBC has generated over 13 million individual credit reports since it was established in 2012.