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We empower Financial Decisions with Accurate Credit Information.

CIB - General FAQs

CIB was established primarily to function as the central repository of credit data for the purpose of minimizing the problem of asymmetric information between the Lending Institutions and the borrowers in the banking sector/credit market thus helping lending Institutions to make informed credit decisions and minimize credit risks associated with Non-Performing Loans (NPL)

It collects, compiles and consolidates loan/credit data for the purpose of assessing their creditworthiness of borrowers. The Lending Institutions provide information about loan repayments and other relevant information of borrowers to the CIB which are consolidated by CIB database system into separate files on every individual customer or business. The credit data/credit history so compiled on borrowers is shared with the lending institutions to help them minimise credit risks by avoiding bad clients

CIB’s primary sources of sustenance is the revenues generated from the sale of Credit Information Reports and subscription fees collected from the lending institutions for Value Added Products (VAPs)

CIB is an autonomous financial infrastructure company registered under the Companies Act of Kingdom of Bhutan, 2000, licensed by the RMA in December 2015 and Ministry of Economic Affairs in February 2016

CIB is regulated and supervised by the RMA but it is not a financial institution. It is a financial infrastructure that supports financial stability and credit market efficiency through providing credit assessment tools that help banks and lending institutions improve their credit risk management systems thus improving their asset quality and promoting discipline in the credit market

The total authorized capital of CIB is Nu.100 million, out of which the total paid-up capital is Nu.25 million. Out of the total paid-up capital, Ministry of Finance owns 44% (Nu.11.00 million) and 8 Financial Institutions own 56% (Nu.14.00 million). 44% paid-up capital initially held by RMA was transferred to MoF on 25 September 2017

A Credit Information Report (CIR) is a detailed record of an individual's or a company's credit history. It is also commonly known as a credit report. The report provides information about the creditworthiness of the entity and is used by lenders, such as banks and financial institutions, to assess the risk of lending money or extending credit to the individual or business

  • Credit History: A detailed account of the individual's or company's borrowing and repayment activities. This includes information on each credit account, including the date opened, credit limit or loan amount, current balance, payment history, and any late payments or defaults.

  • Personal Information: This includes the individual's or company's name, address, contact details, and other relevant identification information.

  • Credit Summary: An overview of the individual's or company's credit accounts, including credit cards, loans, and other forms of credit.

  • Credit Score: A numerical representation of the individual's creditworthiness, based on various factors such as payment history, credit utilization, length of credit history, types of credit, and new credit.

  • Inquiries: A list of entities (such as lenders or credit card companies) that have accessed the individual's credit report. Multiple recent inquiries may suggest an increased risk of financial instability.

  • Public Records: Information about any bankruptcies, liens, or judgments against the individual or company. This information can significantly impact creditworthiness.

Dispute resolution process lays out the mechanism by which a borrower/consumer can address disputes and issues pertaining to incorrect information and discrepancies contained in Credit Information Reports

  • Improve access to credit for Micro, Small & Medium Enterprises (MSMEs).
  • Minimize information asymmetry between borrowers & lending Institutions.
  • Reduce costs to serve through functioning as the single point of inquiry for credit information.
  • Aid in improving credit risk management practices of lending institutions.
  • Reduce non-performing loans through aiding credit decision making process.
  • Facilitate Regulators to manage consumer and business indebtedness, and ensure economic stability.
  • Facilitate objective assessment of creditworthiness of borrowers through sharing factual credit history/data on credit exposure of borrowers.
  • Promote better credit terms for financially responsible borrowers.
  • Create a healthy credit culture through promoting responsible borrowing.

Credit Score - Borrowers

A credit score is a numeric value that represents a borrower’s creditworthiness. Credit score ranges from 60 to 960 and is used by lending institutions to assess the risk of lending money to a borrower. The higher the credit score, lower the risk of the borrower defaulting on repayment.

The Credit score provides a quick over view of the ability and reliability of a borrower to repay a loan based on past repayment performance. It is the first information that lending institutions will check when a borrower applies for a loan or a credit card. A high credit score is an indication that the borrower is creditworthy and has higher likelihood of repaying the loan on time.

Access to Credit: A good credit score makes it easier for borrowers to access credit products like loans, credit cards, and mortgages. Lenders are more likely to offer favourable terms and lower interest rates to borrowers with higher credit scores.

Lower Interest Rates: Borrowers with higher credit scores are generally offered lower interest rates on loans and credit cards. This means that over the life of a loan, they will pay less in interest, saving them money.

Faster Loan Approval: Lenders often expedite the approval process for borrowers with good credit scores. This can be particularly important in situations where quick access to funds is needed.

Negotiating Power: A strong credit score gives borrowers negotiating power when dealing with lenders. They can use their good credit history as leverage to negotiate better terms and interest rates on loans.

Security Deposits and Collateral: Borrowers with lower credit scores might be required to provide security deposits or collateral as a form of insurance for the lender. Those with better credit scores are less likely to face these requirements.

Rental: As the usage of credit scores gain popularity in the near future, Landlords may resort to using credit scores to evaluate the financial discipline of prospective tenants and to accept those with high credit scores.

Employment Opportunities: Some employers may check an applicant's credit score/history as part of the hiring process, particularly for roles that involve financial responsibilities. A good credit score can reflect positively on an applicant's financial responsibility.

Building Credit History: Successfully managing credit and loans helps build a positive credit history over time. This history becomes important when seeking larger loans, such as for a home or business.

Factors Determining a Borrower’s Credit Score

  1. Payment history:
    Refers to a record of borrower’s past payments on loans, credit cards, bills, and other financial obligations. It documents whether payments were made on time, late, or not at all and provides insights into the borrower’s reliability and financial responsibility.

    A positive payment history, with consistent on-time payments, generally results in a higher credit score and better access to credit.

  2. Credit at risk:
    Refers to the potential for a borrower to default on his credit obligations. A higher credit at risk increases the likelihood of the borrower not being able to make the scheduled repayment thus increasing the risk for the lenders.

    A higher credit at risk can lower the credit score.

  3. Credit utilization:
    Refers to the portion of the total credit available that a borrower has utilized. Higher credit utilization rate (100%) is an indication that borrower has higher probability to default. A lower utilization rate (usually below 30%) is generally considered favourable.

    A higher credit utilization rate of can have negative impact on your credit score whereas a lower credit utilization rate can have positive impact on credit score.

  4. Payment capacity:
    Refers to the borrower’s ability to make timely and consistent repayments on his financial obligations such as loans, mortgages and other debts with straining his budget.

    A decrease in borrower’s income or a corresponding increase in his debt obligations can adversely affect his repayment capacity thus resulting in lower credit score.

  5. Credit mix:
    Refers to the number or variety of credit accounts a borrower uses in the form of credit cards, mortgages, car loans, student loans, and other types of credit facilities.

    Having a diverse credit mix combined with records of timely repayments can have a positive impact on a borrower’s credit score, as they are indications of the borrower’s ability to manage different types of credit responsibly.

  6. Default payment:
    Refers to the failure of the borrower to make the required repayment on a loan or debt according to the terms and conditions agreed upon with the lender. It reflects instances where borrower has failed to make payments as per the set repayment schedule.

    A higher number of failed repayments can not only lower the credit score but can also lead to penalties, higher interest rates and other consequences such as legal actions.

  7. Age of Credit:
    Refers to how long your credit account has been established and active. A longer length of credit history with good repayment performance will generally enhance the credit score. It's a measure of how much experience you have in managing credit over time. Closing old accounts can shorten your credit history and affect your credit score.

    A longer length of credit history with good repayment performance generally enhances the credit score.

How can a borrower view/access his credit score?

A borrower can reach out or request his/her banker or the CIB to access his/her credit report/credit score and has the right to request CIB for correction of any inaccurate/inadequate data detected in his/her credit report.

Credit Score Dos and Don'ts

Pay your EMI and credit card dues on time Don’t delay or miss the payment
Always pay your EMI and credit card bills in full Avoid paying the minimum amount due on EMI and credit card bill as it will increase your debt and lower your credit score
Target a 30% or less credit utilization & minimize new credit requests before paying off existing ones Don’t exceed the 30% credit utilization ratio threshold as it can hamper your chances for future credit
Select your lenders cautiously and apply for credit only from few reputed lenders who can provide you with credit matching your capacity and profile Do not apply for credit from multiple lenders as queries with multiple lenders can affect your credit score
Check your credit report and credit score at least once a year and particularly after you have paid off a loan Do not overlook errors on your credit report as inaccurate report can have a negative impact on your credit score

What Doesn't Affect Your Credit Score?

  • Age
  • Race/Ethnicity
  • Address
  • Marital Status
  • Income
  • Employment Status

Credit Score - Lenders

Risk Assessment: Lenders use credit scores to assess the risk of lending money to an individual or a business. A higher credit score indicates that a borrower has lower risk of not repaying his loan on time.

Loan Approval: : Credit scores enable lenders to make quicker and more consistent decisions in approving loan applications. Borrowers with higher credit scores are more likely to be approved for loans and offered more favourable terms.

Interest Rates:Credit scores also influence the interest rates offered to borrowers. A higher credit score can lead to lower interest rates, as borrowers with better credit histories are perceived to be more reliable and are therefore likely to be offered loans at favourable interest rates.

Credit Limits: For credit cards and revolving credit accounts, lenders may determine the credit limit based on the borrower's credit score. Higher credit scores may lead to higher credit limits.

Risk Pricing: : Lenders use credit scores to determine the pricing structure of loans. Borrowers with higher credit scores might be eligible for loans with lower fees and charges, whereas those with lower scores might face higher fees

Regulatory Compliance:Many lending institutions are required to follow regulations that ensure responsible lending practices. Using credit scores can demonstrate that the lender is making informed lending decisions based on objective criteria rather than discriminatory practices.

Efficiency and Consistency:Using credit scores provide lenders with a standardized method for evaluating applicants. This allows for efficient and consistent decision-making across a large number of loan applications.

Mitigating Fraud: Credit scores can help lenders identify potentially fraudulent applications. Unusually low credit scores in relation to the requested loan amount or other discrepancies might raise red flags.

In summary, credit scores provide lenders with a quick and reliable way to assess the creditworthiness of borrowers, make informed lending decisions, manage risk, and offer appropriate terms and rates. This benefits both lenders and borrowers by promoting responsible lending practices and facilitating access to credit for those who have demonstrated a history of responsible financial behaviour.

A credit score is a significant indicator that allows financial institutions to stay competitive, mitigating credit risk before lending to prospective borrowers, allows you to upsell lending products, and frequently monitor the credit risk of your current portfolio.

Step 1 - Data Collection
Data Collection from multiple sources.
Step 2 - Exploratory Data Analysis
Initial investigation is performed to discover anomalies.
Step 3 - Feature Engineering
Applying complex computation to derive advance features.
Step 4 - Model Development & Validation
Iteratively applying the modelling algorithm to come up with a best fit model, and to validate the result using statistical techniques such as Confusion Matrix, ROC Curve, Goodness of Fit, K-S Curve (Degree of Separation) & Gini Index.
Step 5 - Model Testing
Testing the developed model to ensure its effectiveness.
Step 6 - Model Delivery
Delivering the final model for implementation in real-world scenarios.

  1. Mitigates the risk of subjective judgments
  2. Automation of the credit underwriting process
  3. Reduces the turnaround time and operational cost
  4. Allows lenders to monitor credit risk periodically
  5. Increases overall profitability

To access and generate credit reports, the banks can resort to the following:

  1. Live Request
  2. Bulk Request
  3. Key Aspect of Scorecard

It is a percentage of likely chances that a borrower will be /will not be able to pay the scheduled loans in the next 12 months. The higher the probability (%) lesser the credit score, & vice-versa.

EXCELLENT 721 - 960 < 12% Rarely failure on repayments in the past 2 years.
GOOD 541 - 720 < 20% Negligible failure on repayments in the past 2 years.
FAIR 361 - 540 < 30% Failed few times on repayments in the past 2 years.
POOR 181 - 360 < 50% Failed several times on repayments in the past 2 years.
VERY POOR 60 – 180 > 50% Failed multiple times on repayments in the past 2 years.