The People's Bank of China (PBOC) will look to further annul credit risks as well as strengthen commercial security by permitting a more widespread use of its credit database, said a senior official of the PBOC.

The database currently covers 560 million individuals and more than 11.6 million businesses and provides a free search service from 200,000 terminals, averaging 260,000 checking requests per day, Su Ning, deputy PBOC president, announced at a seminar on credit risk management.

Those terminals are located across all of China's financial institutions, including commercial banks, non-banking financial agencies, rural credit cooperatives and institutions managing public housing funds, Su said.

Those companies soon able to access the database will be those providing financial guarantees and leasing services, telecommunication firms and public utility enterprises, he said.

The database also contains personal details of individuals and their payment defaults on mortgage loans, social security funds, public housing funds, and bills for mobile and land-line phones.

For a country where tradition sees people prefer to carry cash around than store it in banks, such a database proved arduous to set up, said Wan Cunzhi, deputy director of the PBOC's Credit Investigation Bureau, adding that most of the information was collected by commercial banks.

He said the PBOC was discussing increasing the database's coverage to tracking tax payments and civil compensation with the State Administration of Taxation and the Supreme Court of China.

Linked with the information system of the Ministry of Public Security, the database would be of great benefit to financial institutions in detecting those using fake identities to cheat on loans and set up credit rankings which would help banks identify defaulters.

Most individuals being tracked were people with bank accounts. "The scope is to expand, but it will not grow fast as the remaining population is comprised mainly the elderly and children who are economically inactive," Wan said.

Su Ning said the database had improved the credit environment of China, but that more should be done to educate both the public and financial institutions as to its existence.

The government will maintain a centralized credit database as it will eventually yield the full picture of the financial status of Chinese people and enterprises as well as better support the cross-regional flow of business and individuals.

(Xinhua News Agency August 3, 2007)