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National Credit Bureau Co., Ltd. (NCB) is responsible for acting as a central point for collecting, compiling, and processing credit account information and debt repayment history from member financial institutions to create credit reports for financial institutions to use in considering loans.
Dr. Laxman Atthaphich, Managing Director, National Credit Bureau Co., Ltd. (NCB) Started holding the position on August 1, 2568, gave a special interview. bank finance He stated that he is confident that his appointment will benefit Thailand, with the primary goal of transforming society’s perception of the organization from being merely a collector of credit data and the country’s debt repayment history to becoming a vital financial infrastructure that allows citizens access to appropriate and fair credit.
“Before assuming the position of Managing Director of the National Credit Bureau, I had always been aware of the immense amount of information available here that would be of great benefit to the country. So, when I was approached about taking on this position, I had no hesitation at all, knowing that my role would undoubtedly benefit the country.”
Moving forward to create knowledge for society
Changing your perspective on credit bureaus
Dr. Lasamon stated that the National Credit Bureau has historically served as a centralized center for collecting credit information and debt repayment histories from financial institutions and non-banks to compile credit reports, which reflect the data owner’s financial behavior and discipline and provide an overview of the country’s debt burden.
However, another important role is to create awareness of the value of credit information in enabling people to access appropriate credit. Going forward, the Credit Bureau will play an increasingly important role as part of the country’s financial infrastructure.
“The National Credit Bureau will continue to serve as a national warning system, as it has in the past. However, we will also serve a parallel role: fostering understanding of the value of credit information in enabling people to access credit. This will help change the public’s perception of the National Credit Bureau, reinforcing its image as a key mechanism for enabling people to access financial services more universally and fairly.”
In this regard, to change society’s perspective, we must start by providing knowledge on various issues, including:
1. Provide knowledge about the loan process. Credit information is only one of the factors that financial institutions use to consider loans. Credit information reflects only the character and ability to repay debts. There are many other factors that financial institutions use to consider loans.
“From now on, we must educate the public that the term “credit bureau” doesn’t exist. Financial institutions consider many factors in their loan granting process, and credit information is just one of them. Therefore, the claim that someone with a credit bureau record cannot get a loan is simply not true.”
2. Provide knowledge about “If the information doesn’t go, the money won’t come.” Without credit information, financial institutions are unable to assess risk and may not grant loans.
3. Provide knowledge about the data collection methods of credit information companies. The information in the credit information system of the company is based on the facts of the debt repayment history. The company’s current credit information database shows that approximately 90% have a normal debt repayment history, which is the group of customers with good credit that financial institutions want.
“Our database shows that approximately 90% of people have good credit and regular debt payments. These people want financial institutions to see their information to access loans. Therefore, we need to communicate and improve understanding about this issue so that people understand that information is the key to accessing appropriate financial services.”
Furthermore, educating the younger generation about credit scores is crucial. Access to credit for the younger generation often doesn’t involve credit cards, but rather low-limit digital loans available on e-commerce platforms like Shopee’s SPayLater, which is now a member of the Credit Bureau.
Accessing credit through digital lending channels presents an opportunity for young people to build a strong credit history if they use it with discipline and repay their loans on time. However, they must be cautious about the risk of over-indebtedness if they lack financial discipline.
“Today, young people are beginning to access credit through digital loans for online shopping before applying for credit cards. Therefore, we must educate them that good repayments build credit. This is the first step in their lives that they must maintain.”
Develop a credit information system
Help people access appropriate credit
Dr. Lasamon stated that to achieve the goal of promoting the image of credit bureaus, which provide opportunities for the public to access appropriate and fair credit, in addition to providing knowledge to the public in various areas, guidelines have been established for developing credit information in several dimensions, including:
1. Expanding the scope of information Currently, the law requires credit information companies to collect only loan information. Therefore, there is a plan to amend the law in the future to allow the collection of alternative data, such as utility bills, water, electricity, and mobile phone bills, to aid in analysis and processing to increase people’s access to credit.
“Alternative data is useful because it reflects the borrower’s potential. For example, someone who may be struggling to repay some accounts but continues to pay their phone bills could reflect their potential. Similarly, an SME who has never been late with their water or electricity bills could reflect their continued business. Therefore, obtaining this data could greatly help many people.”
“In addition to credit scores, overseas, alternative data is also processed to create additional scores to existing credit scores.”
2. Increasing data resolution There is a plan to develop a new sticker or data code system to indicate that a borrower’s problems may be due to economic conditions, not financial indiscipline. For example, a code indicating that a borrower’s NPLs are due to the impact of an economic crisis, such as COVID-19.
“Having a sticker doesn’t mean financial institutions will grant you loans. We can’t force them. It’s about providing additional information to financial institutions to help them make informed decisions. The more information provided, the better for decision-makers. We hope that detailed information will help them make informed decisions.”
While there should be a way to differentiate between personal consumption debt and debt borrowed in the name of an individual for business purposes, this will help financial institutions make more accurate decisions.
“Some borrowers may borrow money for business purposes but are unable to obtain business loans because they are not registered as a legal entity. Therefore, if we can clearly identify this group of borrowers, it will benefit them because business loan interest rates should not be as high as consumer loan interest rates.”
3. Development of credit scoring models Currently, we are studying international approaches to create statistical models that can identify groups of people who are NPLs but still have the potential to repay their debts, in order to encourage financial institutions to be more confident in granting loans.
“We want to offer this solution and are currently studying how other countries are using it. We will begin testing it in a sandbox using our existing data to see what it can indicate. If the test results are positive, we will request permission to launch this product as another way to assist financial institutions.”
The idea is also to make credit scores more accessible by creating a credit score that people can easily check via an app, along with recommendations for improving it, to foster a culture of financial well-being.
“With a complete credit information system, credit scores serve as a gateway to new loans and increased credit limits, as well as a signal of whether we can secure loans at affordable or high cost. Many countries are already using this system, and we can implement it without amending the law.”
As of the end of June 2568, the Credit Bureau had approximately 80 million individual accounts in its database, with a debt value of approximately 13.5 trillion baht. Meanwhile, 80% of Thailand’s household debt, which accounts for 87% of GDP, is stored at the Bureau.
“In principle, a data coverage of 80% is sufficient for financial institutions to use in their lending analysis. However, there may be some borrowers whose data is not comprehensive enough, such as low-income borrowers who may also have informal debt.”
The reason why the debt data of the Credit Information Company does not cover all household debt, which is 87% of GDP, is because the membership of the Credit Information Company is voluntary and cannot be forced on all financial institutions to become members. However, most large financial institutions are members because they see the benefits in managing credit.
While members still have a legal duty to deliver accurate, secure, precise and timely information, these processes are costly and require robust IT systems, making them a barrier for smaller financial institutions or savings cooperatives to become members of the Credit Bureau.
Dr. Lasamon said that the Credit Information Company has also established three DNA principles to serve as the core of its operations, namely:
- Reliability, trustworthiness (Trustworthy) By maintaining data security, safety, accuracy and precision, which is the most important foundation of the organization.
- Preparing for the future (Future Ready) By embracing and learning new technologies such as AI and Big Data to improve internal work processes, services, and member connections to be efficient and timely in response to changes.
- Building alliances (Partnership Builder) By working closely with all sectors, divided into 1) the public, which is the sector that must provide knowledge and develop services that are easily accessible, such as checking credit information through applications; 2) members, which include various financial institutions, must develop systems to enable them to work and send information better and faster; and 3) regulatory agencies, which must communicate and provide in-depth information for determining useful policies.
“The ultimate goal of the National Credit Bureau (NCB) is to serve as the country’s core financial infrastructure, resilient and adaptable to global changes, providing high-quality credit information. We believe that credit information is integral to Thailand’s economic growth, and we want to steer everyone in the organization in this direction.”
Source: moneyandbanking.co.th
