“Dimitrie Cantemir” Christian University Knowledge Horizons - Economics Volume 7, No. 4, pp. 37-41 P-ISSN: 2069-0932, E-ISSN: 2066-1061 © 2015 Pro Universitaria www.orizonturi.ucdc.ro INTERNATIONAL EXPERIENCE OF DEVELOPMENT OF CREDIT HISTORY BUREAUS A. ROLLER1, A. ZUBIC2 1,2 Department „Banks and banking activity “, ASEM, E-mail: [email protected] Abstract Bureau credit histories are of particular importance in the work of each banking system. Information about debtors is used by banks and institutions of auditing company to carry out the Key words: process of creditor to the maximum level of benefit. Reducing bad loans can be obtained only if the release of the credit quality financial institutions. And for the Republic of Moldova is felt the Bank financial institutions, impact of credit histories Bureau. credit bureaus, credit finance Introduction The first case in history on the exchange of information operate some local offices of credit, chambers of on customer’s ability to repay the loan occurred in commerce created as nonprofit organizations. 1803, when several British tailors began to Credit bureaus were founded not only in countries with communicate to each other about the manner and a developed financial system, the USA, UK, Australia, terms of payment of the people they serve. This was New Zealand, France, Germany, Belgium etc., but also possible due to the fact that some customers did not in countries with less developed financial markets. pay or delay payment deadline set far. British tailors Example of such countries is authentic Sri Lanka, have noticed that some customer’s credit control in a Mexico, Bangladesh and Philippine. Offices in these dress, so not paying for this order addressed to other countries collect information about individual borrowers tailors the command as credit is made. To prevent such (commercial sector) and corporate clients. For situations, the first association was created with a example, office "Chinese walls" was created to similar aim Credit Bureau, under the name "the London aggregate information about companies and the Association of mutual cooperation". corporate business sector. The three offices to collect information on private sector Experience of developed countries in creating loans in the US are Equifax, Experian and Trans Union, credit history bureau holding national database. The turnover of these The first credit bureau started its activity since century companies to provide credit histories, as mentioned by XIX. The first such credit bureau appeared in Austria the magazine "Banque" has exceeded 1.5 billion. US 1860. Then in 1890, credit bureaus have emerged in dollars. the US and Sweden, as was done in Finland in 1900, Dun & Bradstreet offices in the USA is the most South African Republic in 1901, Canada in 1919 and important office which holds information about the Germany 1927. A trend higher was found in the period corporate sector. Also, there are credit bureaus smaller after the Second World War, when opened credit and specialized agencies which have no national bureaus or in other countries like Argentina and information. Dun & Bradstreet have opened offices / Uruguay (1950), Great Britain (1960), Ireland (1963), branches in several countries, working with their local the Netherlands and Japan (1965), Switzerland (1968), partners with their databases. It contains information Denmark (1971), Spain (1994), and the list of countries about 53 million operators. could continue. World practice shows many forms of Experience is the largest credit agency in the UK; organization of credit history bureaus, the number and however there are other private offices. type of ownership of their country. In New Zealand there is no public credit bureaus; Thus, the USA, Brazil, Argentina Credit bureaus is instead there are companies that offer reports on most private companies for profit, the profit obtained individual and corporate loans. One of the most from information services. However, in these countries 37 Knowledge Horizons - Economics Volume 7, No. 4, pp. 37-41, © 2015 Pro Universitaria recognized companies in New Zealand is Baycorp NZ the Monetary Board, 30% and 19% belongs to Limited. commercial banks and other institutions. In Australia, Credit Reference Ltd., provides information In Bangladesh, the Credit Bureau was founded as a on companies in the small and medium business, Dun department of the Central Bank. Credit Bureau collects & Bradstreet (Australia) offers information about the annual information (name, director, facilities granted, credit situation of corporations. penalties, arrears, property titles, etc.) from commercial In Japan credit bureaus are established as companies banks on all corporate borrowers who benefited from which belong to a consortium of creditors. When they facilities and presented at the request of the Credit founded offices in these countries, mostly from private Bureau report on any bank loan concerned. The initiative in some European countries such as France, information is renewed monthly for consumers with Belgium and Germany on loans and debt information greater opportunities Taka 100 Lake and quarterly for services are offered by Central Banks subdivisions. customers with greater opportunities for Taka 10 lakh. In France, there is a National File ("Le fishier National") In the Philippines, the Information on Loans was for centralizing information on payment incidents, not founded by the Central Bank together with the run by private operators, but the Bank of France. The Securities Commission and Securities and Philippine division of the French Central Bank is Credit Bureau, Institute in 1982. Financial Officer Office provides which collects information about the name, address, information about both individual customers and type of activity, type of facility to economic agent’s corporate clients about. The report is an analysis of month on loans to corporate clients and more than corporate commercial, history management, group 50000. The information provided banks/lending management, reporting, payments, banking institutions creditor is provided free of charge. relationships, financial conditions, legal structure and In Belgium, which provides credit information offices conditions of the exchange. Their database contains were opened as a division of the Central Bank by Royal over 50000 files; the report provides information about Decree in order to curb non-payment of individual individual identity, relations environment, financial loans, mortgages, leasing, and corporate loans. Credit position and negative records, the database contains Bureaus operations on individual borrowers contain 150000 individual reports. only negative information. Under the Royal Decree for The databases of credit history bureaus in developed commercial lending is compulsory consultation Credit countries is formed, usually over several decades, and Office, but optional for mortgage lending. The in some of them - USA, Canada, Finland and South consumer has the right to verify and request additional African Republic - credit bureaus have started activity information or explanations. Under the Royal Decree is since the late nineteenth - early twentieth century. The mandatory for all authorized consumers, companies volume of information exchanged between lenders offering mortgages to provide information Credit through the credit history bureaus is important – for Bureau. example, in the USA, Belgium, Brazil, Britain, Japan In Germany runs an association "BUNDES-SCHUFA” and Germany the number of credit reports provided eight regional credit offices, autonomous legally and exceeds the population. In the system of credit history economically; and the General Insurance Association of bureaus capital concentration level is relatively high - Protection to Credit "SCHUFA" - whose founding am as in the USA, UK and Japan leading role it plays two commercial banks, savings banks, cooperative banks, to three large offices of credit histories and other bank card issuing companies, etc. Banks and financial countries (Australia, Germany, Argentina, Brazil institutions that offer Central Bank are obliged to report Finland, Ireland) there is only one office of credit about debtors whose debts exceed 300 000 Euro for 3 histories. This is explained by the fact that a large months from the reporting date. Reporting Office of the company is able to focus its database maximum German Central Bank shall inform the institutions volume and full of accurate information and to use concerned about the total debt of borrowers and information technologies in the work of art. number of credits taken. In the early 90s it began the process of extending credit In Russia first appeared office (2005), where there is history bureaus work on international financial market. the National Bureau of Credit, founders of the Chamber The highest offices of credit histories were intended to of Commerce and Dun & Bradstreet Corporation. Just become transnational corporations. As a first step in own credit bureaus have created the Banking this direction was the acquisition of control or obtaining Association of Regional Banks Association of Russia credit histories national offices in several countries of were consulted establishment by German experts from Latin America, Europe and Asia. the Schufa. The largest private credit bureau in the world is In Sri Lanka, credit bureau was established under the TransUnion (Dun & Bradstreet), Experian and Equifax. Act on Credit Bureau in 1990. The 51% stake