1. © 2006 CRIF International Credit Bureau Experience: Focus on Eastern Europe BACEE Credit Bureau Roundtable Budapest, April 21 st 2006 Petr Kucera Managing Director – CCB Czech Credit Bureau CRIF Group

2. © 2006 CRIF 2 Table of contents CRIF Introduction Why a Credit Bureau? CEE and CIS markets: benefits from CB Credit Bureaux development: the road map CRIF: Competence and Flexibility International Credit Bureau Experience: Focus on Eastern Europe

3. © 2006 CRIF 3 CRIF international dimension CRIF is one of the main international groups specializing in the development and management of credit reference agencies and decision support systems for the retail credit markets CRIF is the leader in Italy, with over 440 client banks and financial institutions and 85% of Italian branches connected daily online with its services CRIF has been successfully expanding credit bureaux activities in the CEE region (to-date involvement in 4 registries (Czech Republic, Slovakia, Croatia, Russia) Through alliance with TransUnion, we jointly manage the largest number of bureaux worldwide among international specialised operators. CRIF Introduction

4. © 2006 CRIF 4 Tampa Mexico City Bologna Milan London Prague Bratislava Moscow National Bureau of Credit Histories

5. © 2006 CRIF 5 Bureaux – CRIF worldwide market place Different types of our Bureaux involvement Credit Bureau: in the emerging markets it is strategic to support and speed up the economy growth; Insurance Bureau: essential in mature markets to streamline operations and strengthen fraud detection; B2B Bureau: essential in mature markets as a strong companies support for completing public information and for the early detection of payment delay. CRIF worldwide marketplace

6. © 2006 CRIF 6 CRIF worldwide market place Czech Credit Bureau: Today: Banking Credit Bureau (June 2002) Non Banking Credit Bureau (launch July 2005) Shared Credit Bureau (launch January 2006) Portfolio Monitoring Services Tomorrow: Credit Bureau Score Credit Application Processing Credit Anti-Fraud Systems SME, B2B extension CRIF worldwide marketplace

7. © 2006 CRIF 7 CRIF worldwide market place Slovak Credit Bureau: Today (operating since 2004): Banking Credit Bureau Tomorrow: 2006 - Non Banking Credit Bureau Credit Bureau Score Credit Application Processing Credit Anti-Fraud Systems CRIF worldwide marketplace

8. © 2006 CRIF 8 CRIF worldwide market place Russian Credit Bureau: In partnership with TransUnion and NBCH National Bureau of Credit Histories Sept 05 – Launch of Credit Bureau & Application Processing for Credit Cards and Personal Loans Approx. 400 Banks Members CRIF worldwide marketplace

9. © 2006 CRIF 9 CRIF worldwide market place Croatian Credit Bureau: Kick off 20 September and go live in May 2006 In partnership with TransUnion and HROK - Hrvatski Registar Obveza Po Kreditima CRIF worldwide marketplace

10. © 2006 CRIF 10 Our Credit Bureau Partners Buro de Credito IRISH CREDIT BUREAU Ireland Mexico Sweden Russia NBCH Germany Brazil Poland Croatia Canada Repùblica Dominicana

11. © 2006 CRIF 11 Provider of complex decision support solutions Credit Reporting (Individuals and SMEs) Business and financial information (Company profiles, Financial data, Judgements, etc.) Business Intelligence and decision support systems (Scoring and Rating) Software and Processing services for management StrategyOne CreditFlow Collection - Information Planning & Development Customer Acquisition Portfolio Management Debt Collection CRIF Introduction

12. © 2006 CRIF 12 Positive Data Credit Bureau Benefits Limitations of a negative Credit Bureau which can be overcome with a positive Credit Bureau model No distinction of shade of black Missing global view on credit positions of a person Not sufficient information on risk of overindebtedness No individual early warning signs in worsening macroeconomic situation – leads to general default levels Substantial reduction of new business generation without positive data. Possibility to override internal policy or result from credit scoring function with positive record in the Credit Bureau Examples from abroad: 14 EU member countries operate positive data bureaux Efforts to switch from negative to posivite in a number of countries (Hungary, Hong-Kong, Latin America, etc.) Establishments in process only consider postive bureaux (Croatia, Russia, Ukraine, Romania, Serbia, Bulgaria, etc.) International CB models

13. © 2006 CRIF 13 Why a Credit Bureau in CEE and CIS market? Why a CB ? Commercial and Retail Market Large Cos and A Clients Retail and Small Business market Current Clients Under- Served Market Emerging & Transition Market issues: Low competition level Focus on Corporate lending Low focus on SME lending No relation with SME & Consumer

14. © 2006 CRIF 14 CB role in emerging market Understand the basic principles of CB qualities Aggregate main phases and start the data sharing process Design the most appropriate corporate structure by thinking globally and acting locally Technical infrastructure Quality - auditing process Commercial policy and evolving plan CEE and CIS markets: benefits from CB From 3 to 10 years!! From 6 to 12 months

15. © 2006 CRIF 15 Benefits for Credit Grantors: Assess overall indebtedness level of clients Avoid Credit Shopping Reduce transaction time and costs Apply rates according to risk level Increase operation volumes at the same risk level Helps avoid lending to consumers who cannot or will not repay (History) Why a CB ? Why a Credit Bureau in CEE and CIS market?

16. © 2006 CRIF 16 Benefits for Borrowers (consumers and small business): Get credit more easily Obtain lower rates according to own risk level Be protected against future over-indebtedness Lower costs of borrowing (Lower risk=lower interest rates) Security of personal data (Information is only accessed with consent for specific purposes) Why a CB ? Why a Credit Bureau in CEE and CIS market?

17. © 2006 CRIF 17 Bank A : A mortgage from a local bank where salary is paid - Paid monthly - Up to date Fourth - Public information & Other: - No court judgements - Applied twice for credit in last 2 years - Never lies on application form - No adverse government records Leasing company B: A leasing car loan - Paid monthly - Up to date Bank C: An unsecured credit card from a new, foreign bank - Paid monthly - High interest Why a CB ? Challenging puzzle

18. © 2006 CRIF 18 Bank A : A mortgage from a local bank where salary is paid - Paid monthly - Up to date Fourth - Public information & Other: - No court judgements - Applied twice for credit in last 2 years - Never lies on application form - No adverse government records Leasing company B: A leasing car loan - Paid monthly - Up to date Bank C: An unsecured credit card from a new, foreign bank - Paid monthly - High interest Why a CB ? Challenging puzzle

19. © 2006 CRIF 19 Bank A : A mortgage from a local bank where salary is paid - Paid monthly - Up to date Fourth - Public information & Other: - No court judgements - Applied twice for credit in last 2 years - Never lies on application form - No adverse government records Leasing company B: A leasing car loan - Paid monthly - Up to date Bank C: An unsecured credit card from a new, foreign bank - Paid monthly - High interest Why a CB ? Challenging puzzle

20. © 2006 CRIF 20 Bank A : A mortgage from a local bank where salary is paid - Paid monthly - Up to date Fourth - Public information & Other: - No court judgements - Applied twice for credit in last 2 years - Never lies on application form - No adverse government records Leasing company B: A leasing car loan - Paid monthly - Up to date Bank C: An unsecured credit card from a new, foreign bank - Paid monthly - High interest Why a CB ? Challenging puzzle

21. © 2006 CRIF 21 Suggested Credit Bureau data content Positive and negative information Private individuals; sole traders; SME & corporate data Type of contracts Instalment operations: (Personal/consumer loan; Mortgage loan; Construction savings loan; Investment loan; Operational loan; Leasing; Export/import loan) Non-instalment operations: (Credit line on current account; Factoring) Credit cards & revolving operations: (Credit cards; Charge cards; Revolving loans) Other public & private external databases CEE and CIS markets: benefits from CB

22. © 2006 CRIF 22 Credit Bureau services evolution From the delivery of credit reports … Output APPLICATION FORM -------- ------ Branch Credit Bureau Applicant Id and Matching Codes, Number of Contracts, Global Exposure, Credit Behaviour, No. of Banks and Financial Institutions, … Input CB development: the road map

23. © 2006 CRIF 23 … to the management of Decision Processes PUBLIC DATABASES CREDIT BUREAU DATA & BUREAU SCORE BUSINESS RULES APPLICATION SCORE Database Integration, Policy Rejects, Credit Policies, Business Rules, Scorecards, Decision Matrix, … Credit Bureau Output APPLICATION FORM -------- ------ Branch Input CB development: the road map

24. © 2006 CRIF 24 Our experience with outsourcing of decision processes BEHAVIOURAL PORTFOLIO MANAGEMENT CREDIT BUREAU APPLICATION PROCESSING FOR PRIVATE CONSUMERS AND SMALL BUSINESS BENCHMARKING PLANNING MARKET DEVELOPMENT NEW MARKETS NEW BUSINESS AREAS CB development: the road map

25. © 2006 CRIF 25 To run a World Class Credit Bureau CRIF support is available in the following areas: Benchmark Consulti ng Gap Analysis Certifica tion Legal Security Operations Marketing Technical

26. © 2006 CRIF 26 The right people for you Thank you