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Source: https://www.telesintese.com.br/ By: Elias Sfeir, President of ANBC
Even if there are strong institutions, a favorable regulatory environment and a healthy credit bureau sector, it is essential to guarantee a positive and developmental atmosphere for borrowers as well through financial education.
Ubiquitous and broad, the term sustainability has also been applied to credit marketThis is because the combination of a healthy regulatory environment and strong institutions can make conscious and responsible credit policies possible. These policies should favor loans and financing with one eye on the health and sustainability of the lender's business and the other on the borrower's financial conditions and prevention of over-indebtedness.
A favorable and transparent regulatory environment, which discourages harmful practices, strengthens free enterprise and the market as a whole, encourages companies to invest in technology, make risk analysis more efficient and expand their business, contributing to job creation and strengthening the economy.
In this way, the sustainable credit is one based on information, including default information, because the difficulty of accessing these records contaminates the granting process and the entire credit ecosystem. From the borrower's point of view, the more information available about them, the lower the chances of default and over-indebtedness. Thus, the sustainability of credit is preserved if the borrower is able to honor their commitments.
In this context, sustainable credit encourages investment, increases the supply of goods and services, boosts the economy, strengthens free enterprise, helps companies to survive and contributes to the well-being of society. The basis for good risk analysis is the quality of databases, so the more extensive and up-to-date the information on borrowers and their histories, the better and more effective the economy will be. But there is no point in collecting a wide range of data without making it easily available and accessible to authorized stakeholders.
This is where the efficiency and specialization of credit bureaus comes in. All over the world, the quality of credit bureaus' work is directly related to the volume and quality of the information they have access to, and in Brazil this is the same scenario. In this sense, the synergy that the credit bureau sector maintains with the Ministry of Economy, Central Bank, regulatory agencies, sector entities and other agents is fundamental
involved.
The intensive and purposeful use of technology in obtaining and processing information has proved to be fundamental for bureaus to be able to build and manage robust and efficient databases, a job that is completed with the storage and security of the information received from their sources.
The bureaus provide credit grantors with knowledge of potential clients and tools for assessing the risks involved. Individuals and companies can rely on the bureaus' services to mitigate risks, such as CNPJ or CPF queries, which make it easier to establish customer categories and determine specific conditions for each one. The bureaus also monitor documents and transactions, generate alerts and reports, offer anti-fraud systems, biometric solutions and digital behavior recognition, as well as renegotiation fairs. All to ensure that the credit and debt recovery policy is as efficient as possible.
In short, the broad portfolio of products and services offered by the bureaus helps to form a "big picture" of the borrower.
Democratizing basic concepts
However, even if there are strong institutions, a favorable regulatory environment and a credit bureaus It is essential to ensure a positive and developmental atmosphere for borrowers as well through financial education. Even with all the content available on finance and investments, there is still a need to democratize the understanding of basic concepts, such as calculating the real interest rate on a loan.
Brazil is diverse, extensive and plural and the challenge for financial education initiatives is to convert knowledge into practice in this multifaceted scenario. Transforming financial education into a financial attitude is fundamental to enabling resources received as a loan or financing to bring real well-being to the lives of people or companies.
To close the cycle of credit sustainability, it is also mandatory to address the concept of ESG. In today's world, companies that have good governance, a watchful eye on the environment, that pay their workforce fairly and that respect diversity to the extent that the term requires, have a better chance of survival and perpetuation in increasingly dynamic and competitive markets.
In short, from a complementary point of view, the credit bureau sector promotes the "S" of the ESG agenda as it democratizes credit for a contingent hitherto excluded from the market. By giving visibility to people, companies and entrepreneurs who were previously excluded from the market due to restrictions, negativity and lack of a track record, the credit bureau sector exercises the "S", Social, in its purest form.
* Elias Sfeir is president of the National Association of Credit Bureaus (ANBC)
