The Hindu Business Line : Crisil plans credit info co with Tata Capital, Equifax

Mumbai, Feb. 5 Rating agency, Crisil, is looking to set up a credit information company, for rating retail borrowers, jointly with Equifax of US and Tata Capital Ltd. While the stake of each partner and the exact quantum of investment are yet to be finalised, the minimum investment would be in the range of about Rs 20-30 crore, which is as per the norms, said Ms Roopa Kudva, Crisil’s Managing Director and Chief Executive Officer.

Crisil had applied to the Reserve Bank of India for the permission to set up a credit information company and also said that it was looking for partners in April 2007, after the RBI invited fresh applications.

The Group of Ministers gave the approval for Foreign Direct Investment up to 49 per cent, in credit information companies late last week.

Good fit

For Crisil, which already provides rating for large corporates and small and medium enterprises, rating of retail borrowers is a good business fit. Ms Kuduva said, “We already do retail loan securitisation. We are probably the only people to do an in-depth analysis of 1 million retail loans. Strategically, our entry into the credit information business will help us to expand our footprint into the retail credit segment.”

However, rating of retail borrowers would require lot of investment in technology and, therefore, a credit information company is a capital-intensive business, she said.

Equifax (which provides information solutions, employment and income verification and human resources business process outsourcing services), will provide the technological knowledge and Tata Capital will provide the credibility.

“This business requires high credibility as you have to convince that you are providing reliable information. The Tata name inspires trust,” Ms Kuduva said.

As of now, Credit Information Bureau (India) Limited is the only player in this segment. The promoters of CIBIL are State Bank of India and HDFC, with 40 per cent stake each and Dun and Bradstreet and Trans Union, with 10 per cent stake each.

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