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T Adira Dinamika Multi Finance, PT Bussan Auto Finance, PT Bank Commonwealth and PT Nissan Financial Services Indonesia, have agreed to become members of PT Pefindo Biro Kredit (PBK) credit bureau as a requirement of the Financial Services Authority (OJK).

Adira finance director I Dewa Made Susila said these multifinance companies chose to join the credit bureau because it fulfilled the authority'€™s obligation that all financing companies should be members of the credit
bureau.

According to the regulation, financing companies are required to become a member of the Credit Information and Management Bureau (LPIP).

PBK, a subsidiary of rating company PT Pemeringkat Efek Indonesia (Pefindo), which obtained a permit earlier this year to become one of the credit watch companies.

A number of companies presently provide credit information, such as Fitch Ratings, Moody'€™s Investor Service, Standard and Poor'€™s, PT Fitch Ratings Indonesia, PT ICRA Indonesia and Pefindo.

Multifinance companies first have to become a member of the Indonesian Association of Financing Firms (APPI) in order to be able to sign up to a credit bureau, which provides individual and corporate credit information.

As a member of a credit bureau, a financing company will be able to access various information on borrowings including the bill-paying habits of both individual and corporate borrowers which is important for them to assess financial risks.

PBK president director Ronald T. Andi Kasim said the APPI currently had 200 members, but so far only four had registered as members of his credit bureau.

Each multifinance company that joined PBK has to pay Rp 120 million (US$8,972) per year. In addition, a member also had to pay an inquiry fee of Rp 12,000 every time they want to access credit information, Juni Henry, PBK'€™s corporate secretary said.

In return, PBK provides multifinance companies with credit-risk profiles of their potential debtors in order to avoid non-performing loans.

PBK uses the principal of the FICO score to measure the creditworthiness of a person, which will show the character of debtors based on their credit usage behavior, not their wealth.

For instance, the debtors might be rich, but if they do not fulfill their obligations to pay their credit, their scores will be low, Ronald said. (win)