The Credit Information Bureau of Sri Lanka (CRIB) launched the CRIB score system at the Cinnamon Grand on Wednesday. The CRIB scores are a credit rating for a borrower and in the future shall include a score for businesses.
The scores are created through an algorithm and the data available at the CRIB.
The score is currently live and free to access for companies with access to CRIB information. In the future, the score will cost Rs. 120 to access.
The CRIB Score is a number ranging from 250 to 900. It provides lending institutions with a consistent indication of the risk level, creditworthiness, and probability of default of a particular borrower. The Bureau believes that due to its low cost and high informational value, credit scores will be used more widely in the economy, as for instance, in assessing potential tenants.
The CRIB score is calculated based on an algorithm which incorporates key aspects of a borrower such as payment behaviour over indebtedness, demographics and utilisation of available credit, when calculating the credit score for that borrower.
Chairman CRIB and Central Bank Deputy Governor H.A. Karunaratne said, “We have had some difficulty with improving our Doing Business Index. This will help us to have a lead in the index and to show our financial inclusion.”
Karunaratne added “In the last couple of years we have seen a lot of noise with regard to the CRIB. This will help us get out of those adverse remarks.
The CRIB has been giving us records for five years, but unfortunately there were deficiencies in analysing and interpreting those figures. This new step will help decision-makers guide their decisions. Even the lowest score will help lenders to analyse the ability of the borrowers.”
“I have to stress this is not the only indicator for lending. This will be beneficial factor for all of us. Bankers can make more meaningful decisions. Borrowers with very good records can get some benefit from this system.”
CRIB General Manager Nandi Anthony said, “This will help to speed up the credit evaluation process. It will augment the current risk-evaluation process.”
“Borrowers can expect faster credit evaluations and by maintaining a high score, they can hope to obtain better rates and higher quantities of credit.”
The CRIB is implementing a new system this year which will collect telecommunication bill data, utility bill data, insurance payment data and other information to improve the scoring process.
The new system will allow users to share their credit score and information on request with other users in the system.
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