CBC generated credit reports for 90% of its borrowers in the country
CBC generated credit reports for 90% of its borrowers in the country
The Credit Bureau of Cambodia (CBC) has a loan history of about 7 million borrowers, which is roughly 70 percent of the adult population in Cambodia.
And for these borrowers, the CBC has generated 6.3 million credit reports; potentially covering about 90 percent of borrowers in its database.
This marks a 19 percent increase in credit reports generated in the last five years. The CBC-generated 6.3 million reports are up from 5.3 million reports generated in 2019.
The demand for CBC’s reports show that both lenders and borrowers are keen on seeing their financial history. While for banks and microfinance institutions (MFIs) access to a borrower’s history helps them assess their creditworthiness before loan disbursal, for customers it can provide insights into their borrowing pattern; and how they could better manage debt. At a recent event, CBC officials told Khmer Times that their credit reports ensure that lenders can extend credit, while minimizing the risks of over-indebtedness.
CBC currently shares these financial reports with its 194 members, which include commercial banks, specialized banks, MFIs, leasing companies and rural credit institutions. This is again an increase from its member base of 167 in 2019. CBC has also said that it is keen on plugging in information gaps. It has stated that its key aim is to ensure more market transparency for better risk management.
Towards that end, in 2021 the CBC launched Credit Report PLUS on its mobile app to allow Cambodians to request their credit report and K-Score (Khmer Score). The K-score acts as a shortcut to understanding the CBC’s full credit report. It’s a number that shows the creditworthiness of an individual and the likelihood of them defaulting.
Currently, the CBC is offering a credit report for 20,000 riels ($4.88) and a Credit Report plus – which is both the credit report and K-score at 26,000 riels ($6.35). The K-score is generated using advanced machine learning techniques with a range from 100 to 1,400. It looks into a range of metrics like the number of loan applications, repayment history, types of loans, etc.
The CBC in its report said, “Regularly checking K-score enables consumers to monitor and stay on top of their financial health to maintain a good credit profile.” Taking this a step further, in 2023 CBC launched KIOSK Self-Inquiry Machines, where customers can find out their credit report. The CBC also offers the first credit report accessed free of cost to Cambodians.
CBC has also said it is using artificial intelligence (AI) and data analytics for new solutions that would provide for better information generation. For instance, CBC has a Credit Risk Heat Map, which is an advanced business intelligence solution. CBC launched this with VTrust Appraisal. It has launched a Digital Real Estate Appraisal that can enable financial institutions to conduct property appraisals using data analytics.
The CBC has also said that it is working in tandem with the NBC on cross-border credit reporting in broader ASEAN and APAC with other countries’ regulators, credit bureaus and financial institutions.
In a statement earlier, Oeur Sothearoath, CEO, CBC, said, “We have enabled system integration for our members to check real-time credit reports. We’ve also integrated our mobile app with the mobile apps of 3 commercial banks, so that customers can more effectively check their financial health.”
But, the CBC also says that it does not get this data without the explicit consent of customers. CBC also has a mechanism in place for customers to raise a dispute in case of any inaccuracy in the credit report generated.
The CBC has also indicated that in future it might look at alternative data sets such as prompt payment of phone bills, electricity, etc. Looking at such alternative data sets might help banks assess new-to-credit customers. The CBC has said it is actively seeking collaborations with alternative data providers to diversify its data sources for the credit reporting system.
CBC CEO Sothearoath has said that such data could play a crucial role towards financial inclusion in the country, as many individuals and MSMEs either lack a formal credit history (new-to-credit customers) or have limited information (customers with thin credit files).
