Shanghai, China's first regional individual credit information system formally started here yesterday, which will serve as a major step to beef up the security of the local individual consumption market.
The move would also play a key role in helping the local banking sectors ward off possible financial risks when delivering loans or credit cards to individual consumers.
"Establishment of such an information system would greatly improve commercial banks' knowledge about their consumers' credibility, thus providing a more objective standard for them to evaluate their loan applicants' credit status," said Wang Huaqing, vice-president of the People's Bank of China (PBOC) Shanghai Branch.
The system will allow the banking sectors to check customers' credit status through networks of over 300 outlets with 15 local commercial banks, which have on-line linkages with a database containing the credit information records of the customers.
So far, the system has credit information on a total of 2 million local citizens.
"The launch of the system would help activate the local individual consumption market," said Feng Jing, general manager of the individual consumption products department with the local Shanghai Pudong Development Bank Shanghai Branch.
Individual consumption loan products, such as individual housing loans, individual education-assistance loans and individual consumption loans for durable products, have already turned out to be one of the most important business engines to propel the growth of the local financial sector in recent years.
Sources with PBOC Shanghai Branch indicate that more than 680,000 local consumers had received a total of 58 billion yuan (US$7.01 billion) consumption loans from local commercial banks by the end of last year, compared with 560 million yuan (US$67.71 million) by 15,000 consumers in 1995.
(China Daily)
