Consultation Paper on the Proposal to set up a Commercial Credit Reference Agency

Press Releases

14 Jul 2000

Consultation Paper on the Proposal to set up a Commercial Credit Reference Agency

The Hong Kong Monetary Authority (HKMA) released for public consultation today (14 July) its proposal to establish a commercial credit reference agency (CCRA) in Hong Kong following the completion of a Study on this subject.

The Study finds that the establishment of a fully-fledged CCRA would bring about significant benefits to Hong Kong in terms of improving the banking industry's credit risk management and reinforcing borrower discipline, thereby enhancing the safety and soundness of the banking system. Commercial customers would also benefit from higher transparency which would result in more competitive loan pricing. To some extent, the CCRA would also enable banks to reduce reliance on collateral and increase their willingness to lend to small and medium-sized enterprises (SMEs). The HKMA therefore considers it desirable to establish a CCRA in Hong Kong.

"The Study indicates a very strong desire for information on the part of the banking industry which is not being satisfied by the market," said Mr Raymond Li, Executive Director (Banking Policy) of the HKMA. "Several factors, including data confidentiality and competitive concerns, account for this market failure. As a result, the channelling of funds to the corporate sector (particularly the SMEs) has been hampered."

The HKMA proposes to address this market failure by mandating submission of the relevant information by authorised institutions (AIs) to the proposed CCRA. "This is consistent with the practices of many other countries which face the same problem. According to the views collected from AIs, most of them also support this," said Mr Li. "By improving the availability and quality of credit information to lending institutions, AIs should be more comfortable in lending to commercial enterprises, particularly the smaller ones where transparency is most lacking. The scheme should be a win-win proposition for the banking industry and the SME sector in Hong Kong."

The Consultation Paper also seeks views on a number of the design features in relation to the establishment of the proposed CCRA. They include the institutional structure, the scope of coverage, and the legal arrangements. "We need to take a view on these issues before proceeding further," said Mr Li. "We have an open mind at the moment and we welcome views."

In the course of the Study, the HKMA has researched the theoretical aspects of a CCRA, interviewed AIs and the credit referencing industry in Hong Kong, and visited major CCRAs in Germany, Malaysia, Mexico and the US to gain an in-depth understanding of their operations. A survey was also conducted in April 2000 among 50 major AIs to obtain their views on the desirability and feasibility of establishing a CCRA.

The public is now invited to comment on the proposal. Interested parties can submit their views to the HKMA or by email ( on or before 15 September 2000. Subject to the views expressed, the HKMA intends to set up a working party with representatives from the relevant industries to sort out the technical and institutional issues in setting up the CCRA.

The Consultation Paper is available for collection at the HKMA, 30/F, 3 Garden Road, Hong Kong. The full text of the Paper is also available on the HKMA web-site ( An executive summary of the consultation paper is attached.

For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Alice Lo, Manager (Press), at 2878 1843

Hong Kong Monetary Authority
14 July 2000

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Last revision date : 14 July 2000