credit information analytics- evolution and benefits 12 april 2013 arun thukral managing director

Credit Information Analytics- Evolution and Benefits

12 April 2013

Arun ThukralManaging Director

© 201 3 ALL RIGHTS RESERVED | PRIVATE 2

Evolution of India’s first credit bureauC

IBIL

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IBIL

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IL is th

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2004 2005 20092007

First and only credit bureau

First and only credit bureau

• 4 million consumer records

Commercial Database

Commercial Database

• 0.6 million commercial records

• Consumer Portfolio review reports

Advanced Analytical tools

Advanced Analytical tools

• CIBIL TransUnion Score

• Personal Loan Score

• Bureau Credit Characteristics

• CIBIL Custom Solutions

Accelerates solution offerings

Accelerates solution offerings

• First central repository on Fraud and Mortgage

• Direct Consumer Access

• CIBIL Detect

• CIBIL Mortgage Check

CIBIL provides world class solutions and has become the risk management partner for all lending institutions in India

2012


Expanding CIBIL Membership

CIBIL strengthened its membership to 903 membersIncluding 373 NBFCs, 307 Cooperative Banks & 40 Rural Banks

150 160 172180 205

282

500

670

766

840

903


Consumer Database Snapshot

Vast database consisting of nearly 261 million records


Commercial Database Snapshot

Strong database consisting over 12.5 million records


Bureau usage Credit decisioning

Bank

Electronic format

PDF format

Enquiry – Web / Bulk

Output

Credit Managers

CIBIL

Individual Entity Check

Business Entity Check

Fraud Check

Property Check

SME Customer

Loan Application

Short-Term Mid-Term Long-Term


• Credit Information Reports• Bureau Scores

• Fraud Prevention tools• Bureau Characteristics

• Custom Behavior Scores• Segmentation Analysis

• Benchmarking• Decision Trees• Stress Testing

• Contact information• Bureau Characteristics• Segmentation Analysis • Optimization Strategies

CIBIL provides tools to enable smarter, more strategic decisions at every stage of the credit lifecycle

• Verification?• Accept / reject?• Tier pricing?

• Initial credit line?

• Credit line?• Authorize?• Pricing?

• Customer service levels?• Market intelligence?

• Collection Prioritization?• Effective contact?

• Treatment Strategies?• Outsourcing?

• Resource Allocation?KE

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UE

SC

IBIL

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Collections / RecoveryPortfolio ManagementAccount Acquisition

Credit-bureau based tools – generic scores, characteristics,. – are indispensible for effective decision management in consumer credit

Credit-bureau based tools – generic scores, characteristics,. – are indispensible for effective decision management in consumer credit

CIBIL Mortgage Check


CIBIL Mortgage Check

• Submission of mortgage loan accounts with property information

• Access based on “Principle of Reciprocity”

• Search Parameters: Property Address

• Supports csv input and output reports. Available online (web) and through bulk modes

• Output response: Mortgage Information Report to give all account & mortgage details related to the Property

Data validation

and loading

Transfer data files

Potential “HITS”Rank ordered

• ______• ______• ______

Electronic format

PDF format

Search property address

Institutions

Output reports

9 million records


CIBIL Mortgage Report Features the following information:

Property information

Address

Property Area (Sq ft)

Survey number

Type of Security (Prime/ Collateral)

Summary of present & past

mortgages

Member Name Account number

Account Open date Account Close date Reporting date

Charge/ Mortgage creation date Charge/ Mortgage release date

Loan Value Market Valuation Agreement Value

Mortgage details

Charge Type of product

Encumbrances Documents submitted Place of mortgage

Borrower information

on each mortgage

Name

Date of birth Gender

Telephone(s) Address

Identification number(s) – PAN, Passport no., Voter ID, Driving License No

Enquiry log Enquiring Member Applicant nameDate Enquiry purpose

Credit Activity Trends


Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

THE GROWTH IN CREDITIs it different this time around?

NEW ACCOUNTS BOOKED BY QUARTER2006 to 2012

2006 2008 2010 2012

GROWTH IN UNSECURED LENDING

UNSECURED LOAN DRIVEN GROWTH

SECURED LOAN DOMINATE WITH TIGHT CREDIT CONTROLS


Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

THE GROWTH IN CREDITHas it resulted in higher credit penetration?

SHARE OF NEW TO CREDIT BORROWERS2006 to 2012

2006 2008 2010 2012


Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

presence of one trade only

THE GROWTH IN CREDITWhat loans are credit active customer taking?

SHARE OF CREDIT ACTIVE BORROWERS2006 to 2012

2006 2008 2010 2012


Credit Activity(Rev) Significant shift towards secured products over time


CIBIL TransUnion Score Trend for Home Loans

Score Trend of New Loan Accounts Opened

Based on the current lender usage pattern aCIBIL TransUnion Score of 700 or more can be considered a

“good” Score

Score Band 2008 2012

<550 6.1% 2.5%

650-699 4.0% 3.3%

700-749 9.5% 7.0%

750-799 57.2% 24.8%

>=800 23.3% 62.3%


CIBIL Advantage- Members

• Faster processing of applications for loans, thereby leading to time and cost savings for each credit evaluation

• Better credit pricing depending on borrower performance, to adjust interest rate to compensate for escalating risk

• Credit grantors are now much better positioned to implement effective portfolio management strategies

The Bottom line:

Increased profitability, through cost savings as well as improved loan portfolios


CIBIL Advantage- Consumers• Expedites the credit approval process

• Reduces subjectivity in the credit assessment process

• Encourages consumers to maintain greater self discipline in acquiring financial commitments

• Allows consumers to build reputational collateral by following correct repayment behavior

• Provides the consumer with an opportunity to improve their standard of living through easier access to credit


Thank You