KUALA LUMPUR: The introduction of the Central Credit Reference Information System (CCRIS), a credit reporting system, in Malaysia has helped to boost loan growth and improve asset quality.
Bank Negara Malaysia (BNM) assistant governor Marzunisham Omar said since the inception of CCRIS in 2001, loan outstanding grew at an annual average rate of 8.9 per cent while the overall impairment ratio showed a significant declined from its peak of 16.2 per cent in 2001 to 2.2 per cent currently.
Addressing participants of the fourth BNM-IFC Credit Reporting and Risk Management Training yesterday, he said the World Bank, in its Doing Business Report, had ranked Malaysia first in the category of ‘Getting Credit’ for five consecutive years.
Marzunisham said sharing credit information was an important element in the financial system and had important consequences on the functioning of the credit market, financial intermediation, financial stability and overall economic development of a nation.
He said the sharing of credit information, via the CCRIS, which enabled real time access to both positive and negative credit information on borrowers in the banking system, reduces asymmetries of information and search costs thus enhancing access to financing to a broader spectrum of the population.
It also allows for more effective risk-based pricing, which could lower the cost of financing for borrowers with good credit background and history. — Bernama