Why should SMEs provide consents to CCRA for reporting their credit data?
SMEs may have
difficulties in obtaining credit from lending institutions because they
are unable to provide proof of credit standing. However, introduction of
a database containing reliable credit information on SMEs could give
rise to the following benefits:
- Easier for
lending institutions to assess the creditworthiness of potential
borrowers, thereby expediting the loan approval process
- Creditworthy borrowers should be able to obtain loans more quickly and at more competitive rates
- Favorable credit records could work as proof of an SME’s sound financial standing
therefore allocate liquidity to business activities, instead of pledging
resources to lending institutions as collateral for credit
The CCRA is an
important addition to Hong Kong’s financial infrastructure, aligning us
with other major financial markets, such as in the US and the UK.
Support from SMEs is important to the CCRA in terms of the
steady and healthy growth of Hong Kong’s banks and financial
institutions, thereby strengthening the territory’s status as an
international financial center
- Strengthening investor confidence by increasing transparency throughout Hong Kong’s financial industry
- Providing a strong base for development and advancement of Hong Kong’s economic growth.
How will SMEs’ shared information be kept and protected?
institutions and their participating subsidiaries, regulated by the Hong
Kong Monetary Authority (HKMA), can access SME information maintained
by the CCRA. Lending institutions can access the CCRA database when, and
only when, they are assessing an application for a credit facility, or
reviewing or renewing an SME’s existing facilities. Lending institutions
cannot access the CCRA database for any other purpose, such as
Apart from basic
information such as company name, address, phone number and such like,
only credit information is submitted to the CCRA. In this context,
credit information includes positive, as well as negative, data.
Positive data could refer to the limits of your credit facilities and
whether collateral is provided. Conversely, negative data could refer to
repayments overdue for more than 60 days. Sensitive information such as
balance sheet, assets held by directors, and so forth, is not made
available to the CCRA.
The CCRA’s data
operation is run in isolation at Hong Kong Interbank Clearing Limited to
ensure complete separation of CCRA and D&B databases. The CCRA
operation is in full compliance with HKMA guidelines and regulations set
by the Hong Kong Association of Banks (HKAB) and the DTC Association
In the interests of full transparency and data accuracy, SMEs are allowed to access their own information at any time by requesting a CCRA Report. They can then request amendments to be made to the CCRA report, in the event of errors being discovered.
How do we provide consent?
institutions need your consent before they can contribute credit data to
the CCRA. They normally include the requisite provision of consent in
their account terms and conditions of banking services, facility letters
or other relevant documentation. Consent needs to be provided to each
of your lending institutions, if you have borrowing relationships with
more than one.
Please contact your lending institutions to arrange completion of the documentation.