Thailand’s Credit Industry Picks Equifax As Its Technology Partner

ATLANTA and BANGKOK, October 21, 1996 - Thailand’s finance and banking industries have agreed to start a credit bureau to support the nation’s growing credit economy and have selected Equifax as their technology partner for the new venture.

The Association of Finance Companies (AFC), the sponsor of this national project, and Equifax recently signed a letter of intent after the AFC reviewed competing proposals and selected Equifax to serve as the technology partner. The AFC announced its decision in Bangkok last week to start the new venture with Equifax.

A final shareholder’s agreement is expected to be signed before the end of 1996, which in turn would begin a projected 12-month start-up phase for the new operation. The new company will license from Equifax its new international credit reporting system, which will serve as the backbone for Equifax’s expansion into Asia and many other emerging markets.

"With the growing demand for consumer credit, all Thai credit grantors want to get the best credit information available in the shortest possible time," said Narong Pattamasaevi, President of Nithipat Capital and one of the engineers of the venture.

"Use of the new credit bureau will take days out of the approval process for most loan decisions and will significantly improve the quality of decisions," continued Narong Pattamasaevi. "Moreover, having access to this type of information will help through all stages of the life cycle of the asset, not just at the point of origination."

"Thailand is a land of many firsts, and this credit bureau will be the first of its kind in Southeast Asia," said Thomas F. Chapman, Equifax executive vice president. "Thailand is a nation with a consumer economy that’s blooming, and that means the growing middle class wants better access to credit. We truly are delighted to be working with the Thai financial industry to provide the credit information needed for such a consumer credit economy."

The new company, which has not been formally named as yet, will be structured as a joint venture with multiple shareholders. Equifax will hold an equity position, as will members of the AFC; members of the Thai Bankers Association, which represents all local and national banks; a number of Thai insurance companies, and the Thai government through one of its agencies.

In development for the past 18 months, the AFC issued a Terms of Reference Application in August 1995, seeking a world-class partner to provide technology and credit reporting expertise. Narong Pattamasaevi chaired the special search committee, which also included prominent members of the financial community and government sectors.

After lengthy review, a variety of presentations outlining technology solutions and on-site capability inspections in the United States, Equifax was selected to help the Thai financial and banking industries launch their nation’s credit bureau. Over time, the new credit bureau will develop credit and payment histories on every credit-active adult in the country as well as many of the nation’s businesses.

According to Michael Shannon, vice president for international development, the data will be stored and accessed using Equifax’s newly developed international credit reporting system. This system has been under development for the last two years and will be installed in Thailand as the first application of a true Unix-based, scalable system using the most sophisticated search routines, ensuring the advent of hi-tech credit reporting in the Kingdom of Thailand.

"We are targeting January 1, 1997, for the start-up of the venture and expect to be providing a full line of automated services before the end of 1997," said Shannon. "Using the credit bureau will very quickly become a way of life for all lenders in Thailand, and it won’t take long for credit grantors to see the powerful benefits of sharing data."

The Thai financial and banking industries decided to embark on the creation of a credit bureau after recognizing the existing, paper-based system of a small "negative file" (containing information only on people who have not paid a debt) would not support the growing need for credit. The system envisioned will eventually eliminate the tedious documentation required now; actually improve the level of privacy; reduce the cost of extending credit, and stem the incidence of fraud.

The system’s operation is expected to be outsourced to IBM Thailand.

"There is much work to be done to start up a national credit bureau and to coordinate the loading of all existing data from the banks, finance companies, retailers, credit card companies, Government Housing Bank and others," concluded Shannon. "But the Thai financial community already has demonstrated the initiative and the perseverance to make it happen. We are honored to be part of this venture."

Equifax’s selection in Thailand marks the first such move for the company in the consumer credit information business in Southeast Asia, but hardly the first outside the United States. Equifax Financial Services already is helping provide consumer credit information in Canada, Europe and Latin America. In addition, Equifax’s FBS Software unit already is supporting the Bank of Ayudhya and the Siam Commercial Bank, both in Bangkok.