Creditinfo supports PEFINDO Biro Kredit to become the largest Credit Bureau in Indonesia
Having obtained a principal license last August, the Indonesian biggest and oldest credit rating agency, PT Pemeringkat Efek Indonesia (PEFINDO), recently announced their expectation to obtain an operating permit for its subsidiary, PT PEFINDO Biro Kredit (PEFINDO Credit Bureau), to operate as a Credit Information Management Bureau (LPIP). The issuing government authority, Financial Services Authority (OJK), will hopefully issue the licence in the second half of 2015.
After an extensive selection process, PEFINDO Biro Kredit has signed an exclusive long term partnership contract with Creditinfo earlier this month to provide a credit bureau solution and support of their Credit Bureau operations. Creditinfo will provide PEFINDO Biro Kredit with its modular credit bureau solution, CBS5. PEFINDO’s President Director, Ronald T Andi Kasim explained, “The company (PEFINDO Credit Bureau) will provide more comprehensive credit-risk profiles of debtors and credit-rating information about individuals to banks and other financing bodies, utilising the credit-rating information system provided and practiced by Creditinfo. We are currently preparing the company’s IT system and human resources, which are expected to be completed in the first quarter of next year. Afterwards, we expect to obtain the permit in the second quarter of next year, so that operations can be started in the third quarter.”
PEFINDO Biro Kredit’s Chief Information Officer, Jean Hartawan Reksodiputro (pictured on the left) signed the contract with Paul Randall in PEFINDO’s offices in Jakarta to formally seal the relationship.
Paul Randall, Director of Business Development, Creditinfo, (pictured on the right) advised “We are honoured to be entrusted with this important role to use our deep knowledge and experience in the credit risk management industry to help support PEFINDO Biro Kredit’s strategy to be the country’s biggest credit bureau with the best standards and serving as many clients as possible from the more than 500 banks and financial institutions in Indonesia.
PEFINDO Credit Bureau will determine people’s credit ratings based on data obtained from the OJK, as well as from several other financial and non-financial institutions, such as electricity firm PT Perusahaan Listrik Negara (PLN), telecommunication company PT Telekomunikasi Indonesia (TELKOM) and other sources. Mr Randall further explained, “In our experience of managing Credit Bureau in numerous countries worldwide, through providing Credit Scores and detailed Credit Reports of prospective and current borrowers, PEFINDO Biro Kredit will enable the banks and financing institutions to grant lower interest rates to those with higher credit scores. This will provide benefits to both the financial institutions and the customers”.
It is hoped that most of PEFINDO Biro Kredit’s clients are banks and financing institutions, such as multi finance companies and pawnbroker (like PT Pegadaian), will be interested in the new Credit Bureau credit information to assist them in making better informed credit decisions and to reduce non-performing loans.
Further, other non-financial institutions, such as utility companies, will also be able to subscribe to PEFINDO Biro Kredit’s products and services for verifying and assessing their new customers.
In addition, PEFINDO Biro Kredit has gained support from various financial industry stakeholders, including the Indonesian Multi-Finance Company Association (APPI). APPI is one of the company’s shareholders. Other shareholders are PEFINDO, PT Pegadaian (Persero) (the biggest pawn shop in Indonesia), PT Sigma Cipta Caraka (an IT company and subsidiary of TELKOM) and PT Consumer Information Consulting (an Indonesian subsidiary of CIC, the biggest Credit Bureau in Japan).
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As the oldest and the most trusted credit rating agency in Indonesia, PT Pemeringkat Efek Indonesia (PEFINDO), was established on December 21, 1993 under the initiative of the Financial Services Authority of Indonesia (previously known as the Capital Market Supervisory Agency) and the Central Bank of Indonesia.
PEFINDO, which is the only locally-owned domestic credit rating agency, has been rating entities and their debt instruments listed in Indonesia Stock Exchange House. As of today, it has rated more than 500 companies and regional governments. Capital market instruments including the conventional senior- and sub-ordinated bond, sukuk, medium-term notes (MTN), KIK-EBA, and mutual fund have all been rated by PEFINDO. To develop municipal bond market in Indonesia, PEFINDO, with strong support from the World Bank and Asian Development Bank, has started to rate regional governments since 2011. A strategic alliance with Standard & Poor’s (S&P), the leading global credit rating agency, starting in 1996, has enabled PEFINDO to adopt rating methodology by international standards.
PEFINDO has carefully diversified its operations. Services like PEFINDO25, a stock index comprising of selected small- and medium-size companies, and SME Rating are some of the initiatives that have already been launched.
To maintain its independency, PEFINDO is owned by a total of 86 entities representing key players in Indonesia capital markets with not a single owner owns more than 30% interests.
Here are some photos of Creditinfo’s visit to Jakarta to meet the PEFINDO team: