FINANCE

Monitoring loan repayments

New Central Credit Registry at the Bank of Greece will record debt servicing in detail

Monitoring loan repayments

The Central Credit Registry (CCR) to be created at the Bank of Greece in the form of a data system recording in detail the repayment record of each loan issued will constitute the second instrument the Finance Ministry is preparing for the close monitoring of private debt in the country.

The CCR will complement the Credit Assessment Authority, which, as Kathimerini wrote on Monday, will gather information on all debts of the private sector to the state, in order to have a full record of transaction behavior and to facilitate the healthy financing of the economy.

Contributing data to the CCR will be all credit entities that are authorized and supervised by the BoG and supply credit of more than 2,000 euros to private parties/consumers and more than €5,000 to small and medium-sized enterprises, corporations, cooperatives and tradesmen. It will also cover all types of financing (personal loans, consumer credit, business loans, factoring, mortgages etc).

The project will be funded by the Greece 2.0 subsidy plan. According to its description, the Greek credit system has too many nonperforming loans, while the information available on the credit profiles of corporations and individuals are poor in terms of both quality and quantity. As a result, the banking system is unable to sufficiently support the growth of the economy through credit expansion.

The Central Credit Registry will be complementary both to the existing register of unreliable bank borrowers (Teiresias) and the proposed Credit Assessment Authority. Access to the CCR will be granted to investors interested in participating in securitizations, either through the Hercules program or via the purchase of loan portfolios from banks or funds, ahead of the development of the secondary market of nonperforming loans.

In total private debt in Greece exceeds €250 billion. Of that amount, approximately €111 billion is owed to the tax authorities, €41 billion to social security funds, and another €98 billion to banks and funds.