the development of our financial infrastructure. the central credit reference information system, or ccris, ( owned and operated by bank negara malaysia ) was established in october 2001 and has since been acknowledged as one of the most comprehensive public registries in the world. the operationalisation of ccris expanded the role of the credit information registry beyond a supervisory focus to supporting prudent and more efficient credit and financial management decisions among malaysian borrowers and financial institutions. ccris enables real time access to both positive and negative credit information on all borrowers in the banking system and of a selected group of non - banks. at present, the system contains more than 21. 9 million outstanding credit accounts and 7. 6 million borrower records. the system is supported by rigorous controls that protect the integrity of such information, which in turn, enables the bank and supervisors to perform granular and multidimensional analysis and assessments of credit risks and credit - related vulnerabilities in the banking system. for banking institutions in malaysia, the ability through ccris, to tap into ten years of borrower credit records spanning the entire population of banking institutions has been bis central bankers ’ speeches instrumental in accelerating enhancements to the management of credit risk by banks, in particular the development and validation of credit scoring models. today, information extracted from ccris is used as a key input in banks ’ credit decisions. the availability of current information has also facilitated more expedient and robust credit decisions. hence, while banks ’ exposures to the household sector have been on a strong growth trajectory and account for more than half of banks ’ lending portfolio, the quality of the portfolio has remained sound, with a net impairment ratio sustained at a low 2 %. the banking system ’ s exposures to other retail and small businesses have also grown in the last decade, in part due to the established credit track record captured in ccris, which have enabled small and medium sized enterprises ( smes ) and micro enterprises to benefit from improved access to financing. these developments in turn, have resulted in a more balanced and diversified credit portfolio of banking institutions. in addition to ccris, there exist other private sector - owned credit bureaus in malaysia that specialise in niche areas of value - added information and that offer differentiated risk management products to financial institutions. with the wider use of information provided by these credit bureaus, a priority has been to put in place a structure and framework for the appropriate oversight of their activities. this is essential to provide

the necessary safeguards and to protect the privacy of data subjects. it is also equally important to ensure the accuracy, completeness and timeliness of credit information that is used by financial institutions to form credit decisions. inaccurate, incomplete and dated or delayed information can have damaging effects on individuals in terms of access to financing, while exposing banking institutions to the risk of losses. two key pieces of legislation that were recently enacted to support these outcomes are the credit reporting agencies act 2010 and the personal data protection act 2010. the credit reporting agencies act 2010 governs the operations of private credit bureaus and provides for the development of a regulated and structured credit information sharing industry. the personal data protection act 2010 on the other hand regulates the collection, processing and handling of personal information for commercial purposes by data users and provides safeguards for the data subjects against the abuse of such information for improper or unauthorized purposes. the operationalisation of these laws are currently in progress and we look forward to a productive exchange of experience during the course of this workshop which will benefit our own efforts to build a conducive environment for the orderly development of private credit bureaus. despite the compelling public benefits provided by credit registries, regulators face considerable challenges in educating consumers to appreciate how credit reports can help enhance their access to credit and improve the terms under which credit is provided. the role of regulators in public outreach is particularly important in the initial stages of building credit reporting systems to promote public confidence and wide participation. a common frustration that has emerged from the more pronounced emphasis on credit reports in lending decisions has been that access to credit increasingly depends on an individual ’ s credit history, and yet, one can only build a credit history if credit is granted. i note with interest that the workshop will discuss potential solutions to this dilemma. it is important that as the credit reporting landscape continues to evolve and assume more prominent roles in influencing borrowing and lending behaviours, appropriate attention is paid to consumer education to mitigate consumer anxiety and ensure that consumers understand and can exercise their legitimate rights. as uncertainties continue to cloud the global economic outlook at a time when borrowers have become more financially literate, lenders have become more innovative, and financial products have evolved to become more sophisticated and intricate, the need for an effective and efficient financial infrastructure becomes increasingly more critical to ensure the prudent expansion of credit and risk taking. this workshop addresses a key part of that infrastructure that can contribute towards avoiding damaging effects of a financial crisis induced by credit excesses.