Data-driven decision-making is sound decision-making.

Credit data is very important because it allows co-operatives – and all lenders – to determine the financial habits of a potential borrower.

This is the gist of Credit Information Corporation CEO, Atty. Ben Joshua A. Baltazar presentation at a series of webinars in October thru November 2021 attended by co-op managers and leaders. 

Baltazar delivered a presentation entitled “CIC and Cooperatives in the New Normal: Credit Data Subission towards Recovery and Inclusion.

For starters, he answered the question “What is the CIC?”

The Credit Information Corporation (CIC) is a Government-owned Controlled Corporation created by RA 9510 of Credit Information system Act, mandated if to be a central repository of credit data – we collect data on the borrowings of borrowers.  This is submitted by the lenders – banks, lending corporations, microfinance, and cooperatives. 

The data of CIC comes from lenders. And this data bank only grows if lenders will submit credit information to CIC.  These lenders are regulated by the SEC (microfinance), Bangko Sentral ng Pilipinas (banks), and the Cooperative Development Authority (CDA).

But when it comes to the requirement for data collection, that is the CIC’s job.

CIC collects such data to make it available to financial institutions that need it.  This is largely give-and-take.

This data gives lenders a view of the financial condition of borrowers.

Coops have large amount of credit data, owing to the volume of loans that co-ops release.

CIC consolidates this credit data of individual borrowers with that of other lenders, and the loan amounts are matched to the borrowers.  Every time a borrower applies for a loan, lenders can see the person’s borrowing history – capacity to pay, risk of default, and to some degree, the financial condition of a borrower.

This allows lenders to make sound decisions – whether to release a loan or not.

He concluded: “If our cooperatives interface with CIC, the whole environment opens up and allows co-ops to have a better view over borrowers and also improve the credit standing of members.”

Baltazar urges all cooperatives to register with the CIC as submitting and accessing entities.

“As of September , we have 24 million unique data subjects – individual borrowers in our database.  And this comes from 600 submitting entities.  There are only 131 accessing entities at the moment, and we would like to see coops using CIC data,” he said.

“Imagine if we have more submitting entities, our data would be much larger!” he added.

He did not mention the portion of the CISA that allows the CIC to impose penalties on non-submitting lenders.

He stressed that when there is non-payment of loans, it is actually the good or paying borrowers  subsidize the bad borrowers.  In the end, it affects the sustainability of credit co-operatives.

Also speaking at the webinar was Philippine Cooperative Center Chairperson, Dr. Garibaldi Leonardo who delivered a presentation entitled “Collective Consciousness: The Need for a Unified Data Registry for the Cooperative Sector.”

Leonardo said access by cooperatives to credit data will protect members from over-indebtedness and will reward good (paying) borrowers with better service through faster turn-around-time. Furthermore, access to the borrowing habits of borrowers will give co-ops “in-depth insights” on other market segments and trends that may be opportunities for co-ops.

 Leonardo stressed that all decisions must be done through data-driven analytics.

In the end, data-driven decisions are sound decisions!