Delinquency rate for credit
cards has fallen over past 10 years
By Millet Enriquez | Posted: 12 October 2012 2022 hrs
Singaporeans may be charging a higher amount of credit on their
cards on average every month, but the Credit Bureau Singapore (CBS)
has said the number of accounts with missed payments have dropped
in the past 10 years.
This is due to low unemployment levels and responsible lending
policies.
While the monthly credit card balance per consumer - which consists
of charged amount and rollovers - rose 54 per cent from S$3,275 in
2002 to S$5,034 in 2012, the percentage of credit cards with
overdue payments fell to 2.07 per cent of credit cardholders this
year.
That is compared to 2.4 per cent a decade ago.
The average monthly default rate in the past eight years was also
at a low of 0.06 per cent.
The bureau, which celebrates its 10th anniversary this year, is set
to introduce an SMS alert system by end-November to inform
customers on fraudulent use of their identity for loan
applications. This is to enhance its credit monitoring
system.
CBS is also expanding its data provider base by including
non-banking institutions like telecom and utility companies to
gather customer data which can be used for credit
assessment.
William Lim, executive director of the Credit Bureau Singapore,
said: "This is what we normally call alternative data, the
non-traditional source of data. It helps the new markets entrants,
the consumers who have no credit history to have a credit
history, so that the lenders can have better visibility in terms of
their credit performance in the past. So if I am a new graduate
coming onto the job market, there is actually no history that I
would have with CBS."
CBS is also exploring cross-border exchange of data with credit
bureaus in other countries.
Mr Lim said: "We believe that in a current situation where the
workforce is very mobile, that can be beneficial to consumers as
well as to lenders alike. So it is something that is on the
table."
In his keynote speech, Minister of State for Trade and Industry Teo
Ser Luck, who was guest of honour at the CBS 10th anniversary
seminar on Friday, said Singapore ranked eighth in the world in
terms of credit access, citing the Doing Business 2012 report by
the World Bank.
He also noted the role of a strong credit bureau in a country's
financial infrastructure and overall economic growth.
Set up by The Association of Banks in Singapore
and Infocredit Holdings in 2002, CBS helps financial services firms
in their risk management by providing credit
data.
From an initial 10 members, the bureau now has 28.
It provides over one million credit reports to members each month -
up from over 8,000 monthly a decade ago.
Its credit card base has also grown to over 1.4 million from only
747,091 in 2002.
- CNA/ms
