Credit reporting expands access to finance, especially for lower income consumers and MSMEs and plays a key role in improving the competitiveness and efficiency of banks by reducing loan processing costs as well as the time required to process loan applications.
Intuitively, the availability of credit information would imply a more efficient allocation of credit at lower interest rates accompanied by higher economic growth and a less lop sided income distribution. With increasing coverage, which would ultimately subsume the entire population of loans data, the information from CICs may, in future, support both on and offsite supervision.