Credit information sharing provides credit history (information capital) as an alternative form of collateral to the traditional physical collateral, to secure credit facilities from banks. Individuals will also be able to use their positive credit history to negotiate for better terms and conditions from their banks.
On the other hand, banks will benefit from the mechanism since it will address the problem of information asymmetry that was used to raise a risk premium on loans and by extension the problem of non-performing loans which has in the past threatened the stability of the banking sector.