Credit Bureau

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• Credit Bureau
• The Foundation for
• Successful Consumer Lending
• by
• Christian Weidemann

2
Agenda

• Challenges for Automotive Financing
• Advantages of a Nationwide Credit Bureau
• Key Facts / Standard Handling
• Example Germany - Schufa
• Next Steps

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Challenges for Automotive Financing
Nationwide Credit Bureau Missing
Deregulation of Used Car Market
Variation of Regional Local Government
Regulations
Automotive Financing Challenges
Elimination of Cumbersome Procedures
Securities for Car Financing
Regulated Interest Rates
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Advantages of a Nationwide Credit Bureau

• Micro Economical Impact
• Profitability Improvements
• Statistical Data Collection
• On-line Data Access
• Potential Link to Automated Scoring Systems
• Same Information for All Concerned Parties
• Macro Economical Impact
• Partial Elimination of Fraud / Minimizing Risk
• Availability of Updated Information
• Availability of Data Infra-Structure
• Easy Data Management for Other Debt Related
  Industries
• Bad Debt/Loss Ratio Improvement

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Key Facts / Standard Handling

• Legal Structure / Shareholding
• Creation of a Data Pool or Link between Different
  Data Pools
• High Standards for Data Protection / Reciprocity
• Participants in Information Sharing
• Limited Access to Data Pools via Registration
• Win Win Situations for Participants
• On-going Update of Information During a
  Contractual Relationship
• Offer of Mathematical/Statistical Based Scoring
  Methods on Request (Additional Services)
• Easy Communication via Internet

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Example Germany - Schufa
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Example Germany Schufa Cont

• All Banks (e.g. Commercial Banks, Specialized
  Banks, Regional Banks, Saving Banks, a.o.)
  Reporting of Positive/Negative Characteristics
• Trading Companies, Direct Retailers,
  Telecommunication, Insurance Companies, Public
  Companies for Energy Supply, a.o.) Reporting of
  Negative Characteristics Only
• Persons with minimum one negative characteristic
  (end of 2002) 4,2 million people or 6,42.
• Persons with Only Negative Characteristics (end
  of 2002) 2,1 million people or 3,26.

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Next Steps

• Regular Contacts of Automotive Financial
  Institutions (AFI) with PBOC
• Sharing of Information with the Regulator
• Wish List Preparation Including Proposed Set of
  Data for PBOC