CIBIL to tap telecom, insurance for business opportunities

Besides banks and other financial institutions, CIBIL is looking towards telecom, insurance and MFIs as potential business opportunities

Credit Information Bureau (India) Ltd (CIBIL) has said that it is looking to expand its business by tapping new avenues and is in talks with telecom and insurance players.

Arun Thukral, managing director, CIBIL, said that he would be holding discussions next week with telecom players and officials in New Delhi in order to understand their business requirements. He said that telecom verification could become an alternative source of credit history for at least post-paid mobile customers. CIBIL already has an understanding with Vodafone Essar, but details were not provided.

Besides banks and other financial institutions, CIBIL is also looking towards telecom, insurance and microfinance institutes (MFIs) as potential data sources, Mr Thukral said. Earlier, in March, CIBIL signed partnerships with 31 MFIs to start a microfinance credit information bureau.

Similarly, Experian, the latest entrant in the credit bureau space is also ready to expand its services beyond individual credit information report (CIR). Phil Nolan, managing director, Experian India, said, "Yes, we would be looking to expand our services over time to include any industry sectors permitted within the Credit Information Companies (Regulation) Act (CICRA) and as per the RBI guidelines."

At present, CIBIL caters to about 300 members including banks, co-operative banks and non-banking financial corporations (NBFCs), and holds information of around 16 crore trades across individuals and businesses. The data, maintained by CIBIL, automatically gets refreshed every month from its members.

CIBIL has started providing a credit information report (CIR) to individuals through its website. However, as there is no separate mechanism to verify the identity of an individual, it is using postal services to send these reports. This whole process takes about a week. However, Mr Thukral said that the credit bureau is working to automate the process and individuals would be able to access their CIR through email or other such modes from the first quarter of the next fiscal.

So far, CIBIL, in which TransUnion International Inc holds 19.99% stake, was the only credit bureau. However, last year, the Reserve Bank of India (RBI) permitted Equifax Credit Information Services, Experian Credit Information Co of India and Highmark Credit Information Services to set up credit bureaus.

Earlier, in August, Experian started its operations in India. This was followed by Equifax, which last month commenced its operations in partnership with Bank of Baroda, Bank of India, Kotak Mahindra Prime Ltd, Religare Finvest Ltd, Sundaram Finance Ltd and Union Bank of India.

The last credit bureau in the line, Highmark, still has to start its operations. However, according to informed sources, it has started work with microfinance institutions network (MFIN), a self-regulatory organisation which has 39 members. MFIN, supported by philanthropic investment firm Omidyar Network and International Finance Corp, a member of the World Bank Group, is also planning to set up credit bureaus for the microfinance segment. MFIN has invested in Alpha Micro Finance Consultants, which in turn has invested around Rs2 crore to set up a credit bureau. This credit bureau will provide information like borrower name, address and loan details to CIBIL and Highmark.

Commenting on the increasing competition and its effect on business, Mr Thukral said, "Competition in any business is a welcome step as it gives better service to customers. In addition, India, which is at a nascent stage in the credit information business, offers good opportunities for growth. I think for a country of the size of India, three more players will not affect business as there is space for everyone to grow."

Echoing the same, Mr Nolan from Experian India, said," Competition is always beneficial for the development of any economy. I believe that the advent of competition in the Credit Bureau space in India will strengthening the credit economy of India which is a key aspect to accelerate growth and will benefit all stake holders. Access to organised credit is also fundamental to spur economic activity." 

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