Retail Innovations
Posted on August 5, 2015

Credit Information Sharing (CIS) System


CIS is a mechanism through which various lenders electronically pool and pull borrower information using centralised (credit reference bureau) databases, with the aim of addressing information asymmetry between borrowers and lenders. Left unchecked, information asymmetry often results in adverse selection, unsuitable loan products/terms, and exclusion of certain categories of borrowers from the credit market. Agriculture financing is severely affected by lender insistence on physical collateral as a premary consideration in credit decisioning and credit risk mitigation. CIS will enable potential / current borrowers to build a credit history for negotiation better credit terms. CIS also demands proper borrower identification and higher standards of record keeping that will feed into the borrower loan profiles.

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