Chongqing Institute of Commerce has taken a lead in China by
setting up the first personal credit file system for every freshman
starting from the fall semester of this year.
The institute has achieved excellent outcomes since it first set up
the personal credit file system for students who applied for
student loans in 2001. The initiative was warmly received by banks.
In 2000, 111 students from the institute received a total of 1.028
million yuan (US$124,353) in loans. In 2001, 272 students received
loans totaling some 2.685 million yuan (US$324,793) through the
credit file system. Both the number of students who ask for bank
loans and the size of the loans have increased by 150 percent.
According to Gou Chaoli, head of the institute's admission and
employment department and in charge of the project, banks'
enthusiasm for providing students with loans has greatly improved
since the credit file system was established, enabling even the
poorest of students to now satisfy all loan requirements.
Gou Chaoli says the school has cooperated with Jincheng
International Credit Rating Ltd, a professional credit rating and
management organization, to develop a Personal Credit Information
Register Form for the Chongqing Institute of Commerce. Besides the
mandatory personal information and the relevant details of their
parents or guardians, the register also records all the student's
borrowing and repayment activities.
The school will track account management information on all the
pertinent files. In time, the student's repayment activities and
deadlines will be recorded on the form as well.
In
addition, the credit management system provides students with an
assessment of their credit worthiness and is capable of issuing
personal credit reports. According to the school, the student
personal credit file system reduces the risk to banks providing
loans, as well as the cost associated with credit investigations,
all of which assist students in securing loans. When students
graduate from the school, their credit files will be handed over to
their employers and their credit records can follow them into their
professional lives.
Most students believe the establishment of personal credit file
will be conducive in assisting them secure student loans. A female
student who recently registered with the school described the
student loans system as one offering pure credit without any
guarantees or mortgages. If a student who receives a student loan
lacks credit worthiness or evades paying back debts on purpose, it
will have lasting consequences on their futures and discourage the
enthusiasm of the bank for successive students. It may also lead to
students dropping out from the school due to financial
difficulties.
Some experts pointed out that the setting up of a personal credit
database for university students is an important part of
constructing personal credit worthiness and provides valuable
credit education for university students and teaches them how their
actions and ideas may affect not just them, but also those people
around them. Meanwhile, an effective mechanism for punishing those
who violate the credit system also needs to be established in order
to protect the needs of reliable people.
(china.org.cn by Wang Qian, October 17, 2002)