Hong Kong Seeing Benefits of Positive Data in Credit Reporting
March 17 2006
Kong, Feb 27 Consumers in Hong Kong are reaping the benefits
of positive credit data sharing according to recently released
statistics from TransUnion and numerous financial institutions in the
market. The statistics released to the chairman of the Hong Kong
Monetary Authority (HKMA) are part of the first assessment of an
ongoing program that began three years ago, allowing consumers'
positive credit data to be shared by credit providers.
the start of the positive data sharing in August 2003 and September
2005, the following benefits have resulted:
card receivables increased by nearly 10 percent from $54 billion to $59
billion Rollover amounts (borrowing of which cardholders
have not fully repaid) fell by 17 percent from $29 billion to $24
billion The rollover ratio (the percentage of rollover
amounts to the total amount of card receivables) declined 13 percent
from 54 percent to 41 percent. Individual unsecured
credit (non credit cards) loans increased by 38 percent from $29
billion to $40 billion from December 2003 to December 2005. In
addition, the market share of non-bank financial institutions that
offer loans to consumers increased 5 percent from 25 percent to 30
percent. With the complete picture of both positive and negative
information, these institutions were able to better manage, price and
aggressively market their loans to consumers at much lower interest
"These dramatic and positive results are a
testament to what full-file credit reporting brings to both consumers
and local economies," said Ralph Sorice, president of TransUnion -
International. "Not only are there tangible advantages for both
consumers and businesses, but the potential for increased competition
is a benefit for the overall marketplace."
the HKMA said in a public statement that it is impossible to quantify
the money saved by consumers as a result of lower interest rates, it
did note the savings "are likely to be substantial." Joseph Yam,
chairman of the HKMA, also noted that the market is moving in the right
direction and that "consumers are likely to benefit from more
competition" as new players join the consumer credit market.
TransUnion continues to work globally with governments and private
entities to emphasize the benefits of positive data sharing, Hong Kong
offers emerging economies a real-world example of the mass benefits
that can be achieved," said Sorice.