CRIF has recently won the international tender organized by MCA-Benin (Benin Millennium Challenge Account) to establish a credit reporting system in Benin. The MCA-Benin program deals with a series of strategic investments to improve key infrastructure in the country and increase activities and investments in the private sector. MCA-Benin is a body created by the Benin Government to manage the investments of the Millennium Challenge Corporation (MCC), an independent international aid agency created by the U.S. Congress in 2004.
A credit bureau, known as the Centrale d'Echange d'informations, already operates in Benin, dealing only with microcredit information of a negative nature, and which is only accessible by microfinance institutions. A study by MCA-Benin showed that this solution, being limited only to microcredit, was insufficient to reduce the risk of customer insolvency, and therefore decided to launch an international tender aimed at creating a credit reporting system containing both positive data (i.e. regarding customers who regularly repay their loans) and negative data, and which would be extended to include the different types of operators in the lending market.
The solution proposed by CRIF (Centrale de Risques au standard international) will manage credit information sent by banks and financial institutions as well as microcredit institutions through an advanced technology platform, which will be integrated into a single report on the reliability of a credit applicant. The solution will be supplied by CRIF from its headquarters in Bologna, and the language used will be French.
Project development, which will involve all the major banking, financial and microfinance associations in the country, will include an important local presence of a team of CRIF experts that will follow every phase. As requested in the call for tenders, project delivery is set at just eight months, with the conclusion of the project and delivery of the solution to the client due by the end of September this year.
"The development of the credit bureau in Benin,” commented Carlo Gherardi, CEO of CRIF, “represents a new opportunity for CRIF to demonstrate its recognized expertise in the development of advanced technological platforms for the management and centralization of credit information. We are excited to be able to contribute to the economic growth of Benin with a system that will make access to credit more fluid and efficient for the Beninese population and small businesses, and at the same time, will contribute effectively to the containment of credit risk for financial and microcredit institutions. In addition, this project will allow us to further improve our knowledge and thus respond ever more effectively to the needs of our clients worldwide".
On its release, ownership of the solution will be transferred at no charge from MCA-Benin to Association des Praticiens de la Microfinance du Bénin (Consortium Alafia) or to a new Beninese company to be set up, and which will be owned by a variety of parties. CRIF will also take part in the process of establishing the new company so that by the end of the contract, a collaborative relationship to provide an outsourced credit reporting service will have been established between them. This supply contract, separate and independent from the first, will see CRIF committed for the first time to the long term management of credit information services in a West African country.
Around a dozen banks and two financial institutions operate in Benin. Commercial banks, which are present mainly in the cities, have very limited geographical coverage (only 70 branches at the end of 2008), and focus on lending to large companies and to government and state-controlled institutions. They require collateral security for the loans they grant, and have the objective of avoiding any risk so as to preserve profits for their shareholders. These limits in banking credit have led to the creation and development of microcredit institutions, which have grown at a rapid rate, especially in the 90s. Microfinance institutions provide various services that are more easily accessible by the people of Benin, from the first deposit to short-term (3-4 months) and medium term (2-3 years) loans. The range of clientele that use microfinance includes virtually all the lower and middle classes of Beninese society, and all twelve provinces that make up Benin. In 2006, there were 762 microcredit institutions recorded in the country, offering assistance to a group of more than 850,000 people (savers, borrowers and businesses).
The MCA-Benin program comprises four main projects: "access to land", "access to financial services", "access to justice" and "access to markets". In particular, in relation to the growth of financial services in Benin, the MCA project aims to support the economic development of local micro and small businesses by offering them more opportunities to access credit. Specifically, the project includes initiatives and investments to improve the supervision of microcredit institutions, their operational self-sufficiency and the containment of credit risk.
The project with MCA-Benin is part of a broader CRIF strategy of international expansion in the area of retail lending solutions. In fact CRIF, which created and manages the leading credit reporting system now operating in Italy (EURISC), also manages the banking and non-banking credit bureaus in the Czech Republic, the Slovak Republic and Hungary. In addition, it participated in the development of credit reporting systems in Russia, Morocco and Vietnam, as well as the modernization of the technological infrastructure of the credit bureau in Bangladesh.
With its own companies already present in Europe, the Americas and Asia, today CRIF is not only the leader in Italy for retail lending and credit management solutions, but is also the market leader in continental Europe in the field of banking credit information, and one of the principal international operators for integrated business and commercial information services and credit and marketing management services, with more than 1,700 banks and financial institutions using its services worldwide.