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Market of Consumer Credit History in Ukraine – 1

I’ll try to describe in several articles the real situation on the market of credit bureaus in this country. In particular- in the market of credit history as it is.

After all, risk managers need information about the past of potential borrowers - that is a credit history. How do they get it?

In the personal loans market, three credit bureaus are actually engaged in the business of selling credit history:
1) Ukrainian Bureau of Credit History, or UBCH (owned by PrivatBank) – has data on 23 million credit histories;
2) First Credit Bureau of Ukraine, or FCBU, created with the participation of AUB  and  a group of banks – 2.5 million credit histories;
3) International Credit History Bureau (ICHB). Credit Info created in cooperation with Swedbank, but now new shareholders have joined - more than 5.5 million credit histories.

UBCH has the highest hit-rate on the market of credit bureaus - you can find 85% of clients there.

I feel sorry for risk managers in banks where it is not permitted to use UBCH service due to the fear of losing their customers caused by re-crediting by PrivatBank. Sure on the UBKI website customers are offered the opportunity to test themselves on registration for any loan (without stating the bank), but that’s all.

I don’t think that UBCH management is so short term focused to allow unethical actions in relation to their partners. Yes, their service is the most expensive on the market, but the number of credit histories is the greatest.

FCBU is the most independent bureau with great potential. Why is it with a great potential?

At present, it has the lowest hit-rate, which is compensated by the price of service and loyalty to their new partners. Taking into account that it was founded by AUB (Association of Ukrainian Banks), it has great prospects.

As for the ICHB:

After new shareholders entered and Delta Bank suddenly transferred credit histories of its clients to the bureau, there is a common opinion that the bureau became subject of control by Nikolay Lagun.

Last year, at the conference on retail lending, representatives of Ukrsibbank asked former director Irina Nikolaenko whether Nikolay Lagun or Delta Bank was one of shareholders. Irina answered that they were not listed among direct shareholders.
Anyway, I believe that the presence of one of the world leaders KreditinfoShufa in the list of shareholders will let the bureau stay independent.

By the way, KreditinfoShufa is also a shareholder at FCBU.

Next time I will talk about major challenges to the credit history market.