Credit Information Bureau (India) has designed a credit risk assessment system to gauge first-time borrowers, according to MV Nair, Chairman, CIBIL.
The system which now has a significant database of credit history, from microfinance institutions, traders and self-help groups, can give huge insights to financial institutions which are seeing a growing number of people “new to credit”.
A CIBIL study presented at its annual credit information conference here showed that retail credit has been growing at about 28 per cent CAGR over the last three years. Apart from credit cards, consumer, two-wheeler and gold loans form a major chunk of the demand and financial institutions need dependable credit information about potential borrowers.
Nair said the lending landscape is evolving fast, every household now has a bank account, an unprecedented number of licences have been issued for small banks and financial technology companies are enhancing efficiencies and speed of service delivery.
Srinivas Acharya, Managing Director, Sundaram BNP Paribas Home Finance, said CIBIL has contributed to increased discipline among individual borrowers.