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Loan registry helps disciplined clients

SLOVAKIA was the last country in the Visegrad Four to establish a common registry for banks to share the loan history of retail clients, but banks and clients are already seeing positive effects from it.

SLOVAKIA was the last country in the Visegrad Four to establish a common registry for banks to share the loan history of retail clients, but banks and clients are already seeing positive effects from it.

The loan registry in Slovakia was founded in October 2004. It lets banks verify each client and see how many loans they have and how much the loans are worth.

"It is a standard tool in countries with a developed economy," Miroslava Pargáčová, the spokeswoman of Istrobanka, told The Slovak Spectator. "It includes information on the clients drawing the loan and loan guarantors. A bank can find out whether a client is fulfilling his commitments properly and on time."

Thanks to the registry, banks can examine clients more efficiently to determine whether they will be able to pay the loans they apply for, said Miriam Fuňová, spokeswoman of the Slovenská Sporiteľňa bank. That makes the process of assessing a client less time-consuming and less costly.

"The loan registry has made it faster to manage these processes in the banks, and given clients a shorter time to wait when they're arranging their loans," Elena Kohútiková, a member of the board of directors for the VÚB Bank, told The Slovak Spectator. "Clients who are properly paying their loans will soon be able to get loans under more advantageous terms."

The registry helps all disciplined clients, Fuňová said. The final interest rate and other terms of a loan depend on the overall assessment of a client's credit-worthiness.

"When assessing an application for a loan, we consider several parameters, and the information from the loan registry on paying loans with other banks is important," she said.

The loan registry for retail clients was initiated by Slovenská Sporiteľňa, VÚB Bank and Tatra Banka, the country's three largest banks at the time. They are currently shareholders of the Slovak Banking Credit Bureau, which runs the bank loan registry.

The registry is gradually adding more types of data. In the second half of this year, the banks will add evaluation scores for its clients. This is called Credit Bureau Scoring and it lets banks categorise their clients in risk groups according to their expected payment discipline.

The World Bank and IFC Doing Business study praised the Slovak bank loan registry, the SITA newswire wrote. As one of the youngest registries, it was evaluated as the second-most successful in Central and Eastern Europe.

Loan registry users in Slovakia

Tatra Banka UniCredit Bank
Všeobecná Úverová Banka ČSOB
Slovenská Sporiteľňa: Istrobanka:
Ľudová Banka Wüstenrot Stavebná Sporiteľňa
OTP Banka Slovensko Prvá Stavebná Sporiteľňa
Dexia Banka Slovensko ČSOB Stavebná Sporiteľňa
Poštová Banka Banco Mais
Citibank (Slovakia)  
Source: Slovak Banking Credit Bureau

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