Republic of the Philippines
Eight hundred cooperative members, representing 173 primary cooperatives and federations gathered to hear updates from various government and non-government organizations as part of the 15th Southern Tagalog Cooperative Congress. Carrying the theme “Kooperatiba: Kalingap sa Pag-Angat ng Kabuhayan”, day two of the two day event presented various speakers to expound on the future of cooperatives, challenges with an ever changing environment for compliance, as well as solutions to take advantage of new technologies available to improve lending practices and efficiencies.
Positioning itself as a key component in the area of data driven risk management for lenders, the Credit information Corporation, represented by Marketing Specialist Manuel Abad and CEO Jaime Garchitorena, spoke at length on the key elements of the Credit Information System (CIS) that makes the data driven solution significantly more than a matter of compliance to Republic Act No. 9510. Presented as a business tool, Mr Garchitorena emphasized that the CIS represented a significant leap in enabling a thorough "know-your-client" (KYC) environment for cooperatives. Garchitorena noted that “Knowing your client better via the use of data, not only allows better lending to increase the client base with fewer risks of default, but it also enables a closer relationship between the lender and the borrower”.
The CIC head also pointed out that the recent accreditation of Special Accessing Entities (SAEs) would level the technological playing field between the bigger and smaller lenders. The recently accredited SAEs can take basic credit data of loan applicants and turn this into an assessment of the credit worthiness of an individual. These are tools normally reserved for big lenders who can afford the high cost of initial implementation.” Expounding on this, Garchitorena added that SAEs would essentially be taking on the front loaded costs of the technology and allow smaller lenders to subscribe to these services on a per use basis. “High investment costs in technology are less of an issue now for smaller lenders. The key for lenders will be to find the right SAE that can tailor fit their services to accommodate the risk appetite of the lenders and develop customized solutions for them.”
Summing up, Garchitorena emphasized that becoming part of the CIC ecosystem may entail some growing pains as lenders reformat their data and adjust some internal processes to comply to the CIS, but the advantages to the cooperative business as well as the national lending environment would more than justify the efforts.