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tate credit-agency PT Pemeringkat Efek Indonesia (Pefindo) expects to obtain an operating permit for its subsidiary, PT Pefindo Biro Kredit (Pefindo Credit Bureau), in the second half of next year.

The Pefindo Credit Bureau, the first of its kind in the country, is hoping to receive a permit from the Financial Services Authority (OJK) to operate as the Credit Information Management Bureau (LPIP) after it obtained a principal license in August.

The company will provide credit-rating information about individuals to banks and other financing bodies, Pefindo president director Ronald T Andi Kasim said on Tuesday.

Ronald said the company would adopt a credit-rating information system practiced by Creditinfo, an Iceland-based credit bureau and information services group with operations in 16 countries.

'€œWe are currently preparing the company'€™s IT system and human resources, which are expected to be completed in the first quarter of next year. Afterwards, we will propose the permit in the second quarter of next year, so that operations can be started in the third quarter,'€ he said.

Ronald said the Pefindo Credit Bureau would determine people'€™s credit ratings based on data obtained from the OJK as well as several other financial and non-financial institutions, such as state-owned electricity firm PT PLN and state-owned telecommunications company PT Telkom.

According to Ronald, both PLN and Telkom have large customer databases that can show whether someone has a positive track-record in the payment of electricity and telephone bills.

'€œWe will provide '€˜credit scores'€™ of prospective borrowers so that banks and financing institutions can grant lower interest rates to those with higher credit scores and higher interest rates to those with lower credit scores,'€ he said.

As for the service fee, Ronald said the company would charge a range of prices between Rp 6,000 (49 US cents) and Rp 12,000 per inquiry as well as offer a monthly pricing structure for regular clients.

Ronald said the company aimed to be the country'€™s biggest credit bureau with the best standards and would serve as many clients as possible from the more than 500 banks and financial institutions currently registered by Pefindo.

'€œWe hope that most of Pefindo'€™s clients will be interested in us, because we have so many clients from banks and financing bodies, such as multi-finance and [state-owned pawnbroker] Pegadaian, which have benefited from our credit-rating services,'€ he said.

In order to reach its goal, Ronald said the company had gained support from the Federation of Private Domestic Banks (HEN) and the Indonesian Financing Firms Association (APPI). The latter will be one of the company'€™s shareholders, he added.

Ronald previously said that the Pefindo Credit Bureau would be 51 percent owned by Pefindo; 23.6 percent owned by Pegadaian; 10 percent by PT Cigma Cipta Caraka '€” a subsidiary of Telkom; 10 percent by the APPI; and 5.4 percent by PT Credit Information Corporation (CIC) Indonesia '€” a subsidiary of the Credit Information Center (CIC), Japan'€™s largest private credit bureau.

Ronald said Pefindo would spend between Rp 80 billion and Rp 100 billion to establish the company, substantially higher than the minimal capital level of Rp 50 billion stipulated by Bank Indonesia (BI).

Indonesia has offered permits for private credit bureaus since BI issued Regulation No. 15/1/PBI/2013 on credit bureaus, which includes a number of requirements for any entity that sets up a credit-rating bureau.

BI requires, among other things, that the founders of a credit bureau must be an institution and not an individual; that the bureau must be run under a public-private partnership (PPP) model; that the maximum shareholding for a single entity is 51 percent, and the maximum level of foreign ownership is 20 percent.

Prior to the regulation, banks and other financing bodies could only check their prospective and current debtors through the Debtors Information System (SID), which is provided by the central bank free of charge.

BI allows private credit bureaus in an effort to provide more comprehensive credit-risk profiles of debtors besides the SID and to reduce non-performing loans.