The programme, called Credit Data Smart, aims to promote competition in the consumer credit reference industry and enhance service quality.
It will enable people to obtain a free credit report from three CRAs, namely Nova Credit, PingAn OneConnect Credit Reference Services Agency and TransUnion Credit Information Services, once every 12 months.
The introduction of the programme marks an important milestone in the development of consumer credit reference services in Hong Kong, as the city only had TransUnion as its sole CRA previously. By involving the participation of multiple institutions, the new model can provide more secure and reliable consumer credit reference services to the market, according to HKAB.
“It gives the entire system much more resilience going forward, and that competition will also create much better service quality for consumers and for banks alike,” said Luanne Lim, chief executive officer of HSBC Hong Kong and the chairman of the HKAB, at a press conference on Thursday. “So I think that’s a really big leap for us.”
The announcement comes as global credit risks have risen over the past years driven by economic recessions and industrial crises, hurting banks’ lending efficiency.
Last month, China’s top four state-owned banks reported a more than 10 per cent increase in bad loans last year to 1.23 trillion yuan (US$170 billion), as credit pressure rose in areas closely tied to the troubled property sector.
“In terms of the credit landscape, we do expect to face some headwinds,” said Arthur Yuen Kwok-hang, deputy CEO of the Hong Kong Monetary Authority (HKMA), on Thursday.
“The mainland property developers’ situation has not really settled, and therefore we are reminding the banking systems to be on high alert to the credit risk landscape and to manage the risk properly.”
In the uncertain industry environment, HKMA is urging banks to continue to provide adequate support to small and medium-sized enterprises (SMEs), as well as other sectors that are facing operational challenges.
The HKMA, together with the Banking Sector SME Lending Coordination Mechanism, announced last month a series of measures to assist small businesses in obtaining financing from banks and to support their continuous development. Key measures included offering credit products and support services that better serve their needs, and lowering interest charges and fees.