The private persons credit reference exchange system Positiivne Register created by Krediidiinfo in cooperation with lenders says it makes things simpler and cheaper for those with excellent background. Meanwhile, major banks have not joined it.
«Big banks are more conservative, somewhat; for starters, they will be watching how the system develops and functions; however, history shows in three-four years they also join in,» said Krediidiinfo AS chief Veiko Meos.
As acknowledged by Swedbank private financing head Andres Tukk, they are following the launch of Positiivne Register (Positive Register) with great interest while their «clients have thus far been negative about their data forwarded to third parties.» He said they might consider joining should clients demand that, but see it of top importance to protect customer data.
Mr Meos says «Positiivne Register is needed so banks can better implement principles of responsible lending. Meaning they extend credit to people who are able to make timely payments. Thus, actual creditworthiness of consumers can be detected better than before.»
Unlike payment defaults register, Positiivne Register collects data on people with loan obligations who make timely payments without problems. «Also, Positiivne Register aims at preventing defaults.» Private persons credit default statistics say nearly 152,000 have problems on record at the moment with 57 percent i.e. 86,465 in difficulty currently.
With help of the new register, borrowing will be easier for consumers and for those with excellent behaviour, banks offer terms more favourable. LHV Bank chairman Erki Kilu says Positiivne Register will help make objective and precise loan offers to clients. «The more the bank knows about client’s credit behaviour, the better offer we may make,» said Mr Kilu.
According to finance minister Sven Sester, Positiivne Register is a positive development. «When bad loans are avoided and needed loans come with less bureaucracy, all win,» said Mr Sester.
Positiivne Register is based on the principles of consent and minimalism. «Data is only exchanged with consent by private persons. Every day and in each enterprise, the consent must be asked for anew. The consent of today is invalid tomorrow,» said Mr Meos. Minimalism means that data of private persons is exchanged to the lowest possible degree.
As underlined by Mr Meos, there will be no database and exchange of data happens in real time. A bank files inquiry with another financial establishment which has joined Positiivne Register to obtain information on payment behaviour of an individual applying for a loan. For the client, it equals less red tape as they have no need to carry the information on paper.
At the beginning of August, Estonia also saw the launch of DataMe which, like Positiivne Register, accumulates data on private persons loans and credit behaviour – but does build a database and compiles credit histories.
«Any service which improves the Estonian credit market is welcome,» commented Mr Meos, who was unable to specify when they will launch their service. With the technical issues being finalised, this may happen «within months,» hopes Mr Meos.
Marko Vaik, DataMe business development head
While both systems are aimed at mediating private persons loan liabilities information, the essence differs. While Positiivne Register wishes to mediate single data fields, we at DataMe provide the opportunity to enter all state inquiries into the company server thus offering the service of analysis.
Also, DataMe is focussed on providing private clients with information on future services of interest to them. Our innovation in data processing is in aggregation of loans, the quality of servicing them, arrears and all national registers thus providing lenders the full overview of client’s credit behaviour.
DataMe is already in operation and has been joined by Mogo, Finora Capital, Snel Grupp and Tele2.
Private person loan data exchanged via: number of loan agreement; amount of loan; sum left to pay; loan beginning and end dates; loan payment schedule; sum of arrears seven days late; type of loan.
Founded by Krediidiinfo AS with Estonian banks AS LHV Pank, Bigbank AS, TF Bank AB, AS Inbank and credit providers licensed by Financial Supervision Authority: AS LHV Finance, Bondora AS, BB Finance OÜ, Creditstar Group AS, Hüpoteeklaen OÜ, IPF Digital Estonia OÜ, Placet Group OÜ, and OÜ Koduliising.
Data exchange administrated by Krediidiinfo AS.