Strengthening Public and Private Credit Registry Ties
World Bank 2004 Presentation
by Larry Chiang
The importation of a US based credit scoring system here in China will not be successful.
Chinese people residing in America carry little debt and very much act like Chinese people in China. When people do not carry debt in many of its popular forms (credit cards, car loans, applicances on pay-per-month) they do not get an accurate credit rating.
Another problem in China is that there exists a chicken or egg problem. Will Chinese banks lend first or build a credit data base first? The answer is this:
"China's credit system will come from its wealth of debit data"
Debit data is in the form of
-a- cell phone prepayment history. A person properly prepaying his cell phone will have low cell phone number volatility
-b- bank account number stability
-c- ATM cash withdrawl frequency/time/time of day. For example, a person withdrawing $800 at 2pm is different from a person pulling $2000 at 2am
-d- any debit related cash transaction that a bank collects, monitors or tracks (gas, utility, paying an auntie, etc)
-e- inquiries related to balance at an ATM, inquiries related to balance at via Internet, inquiries related to balance over the phone, inquiries related to balance at a branch
-f- deposit pattern(s) vs savings over time
Public and Private Credit Registry Ties World Bank 2004 Presentaion in Power Point