The Origin and Development Prospects of Credit Evaluation Industry-World Credit Organization

2.1 The origin and development prospect of the credit evaluation industry

2.1.1 The emergence and development of the world credit evaluation industry

In the beginning, during the period of the village economy based on villages and communities, there was less social division of labor, smaller trading areas, and limited areas for people to move around. People often lived in one place for several generations. At this time, people were unwilling Broken promise. Because information about dishonesty will quickly spread to his stakeholders, people are unwilling to associate with him, and the survival and development of the dishonest person will be threatened immediately. For example, if Zhang San borrowed 1,000 yuan from Li Si and did not repay it, then Li Si would tell the whole village or community that Zhang San was not trustworthy and would not repay the loan. San's son will be affected by this incident. Another example: Wang Er sells oil in a community. If Wang Er’s oil has a quality problem and people are poisoned, then people may no longer buy his oil in the future, and he can only live in a distant place. However, such economic or other costs are high and it is almost impossible. This kind of dishonesty punishment makes people unwilling to break their promises. We call it the honesty restraint mechanism based on the village economy.

Later, in Europe and North America more than a hundred years ago, due to the refinement of industry division and the expansion of economic transaction areas, credit information could not be transmitted to specific economic transaction entities in a timely manner, and information asymmetry between economic transaction entities The phenomenon is becoming more and more serious. The integrity restraint mechanism originally established on the basis of the village economy has failed, commercial fraud is prevalent, and the risk of dishonesty of economic entities has increased. At this time, in order to prevent being cheated, some companies have to send special personnel to the other party's location to investigate before the transaction to understand the credit status of the other party. Against this historical background, in 1830, the world's first credit service company was established in London, England, mainly engaged in credit investigation services. Distrust and reduce transaction friction, prevent fraudulent behavior, and promote the smooth progress of transactions. The establishment of the company marks the emergence of the credit evaluation industry.

The credit evaluation industry has flourished since its inception. With the development of the credit evaluation industry, the supply and demand sides of credit services are no longer satisfied with merely providing credit investigation information, but began to issue more professional credit evaluation opinions to the investigation objects on the basis of credit investigation information. In 1841, the world's first credit rating agency was established in New York. The credit evaluation industry has also entered the credit evaluation stage from the simple investigation stage. With the development of the economy and society, the scope of credit evaluation objects has also expanded to all walks of life, and the credit evaluation industry itself has begun to divide and refine, and has gradually been divided into four categories of credit institutions: one is commercial credit evaluation institutions, which are Traditional credit evaluation agencies accept one party’s entrustment to investigate and evaluate the credit status of the other party, and provide credit information for the entrusting party’s decision-making. Dun & Bradstreet Company belongs to this category; It is a consumer credit evaluation agency, which mainly collects personal credit information and provides external evaluation reports. The famous personal credit bureau in the United States (Eberly Corporation) belongs to this category. One is the bond credit rating agencies facing the capital market, also known as credit rating agencies, which mainly evaluate the credit strength of bond issuers or bonds. The main representatives of such agencies include: Moody’s, Standard & Poor’s , Fitch. The first category is ICE8000 credit institutions. ICE8000 credit institutions are credit companies and other units authorized by the World Credit Organization (WCO) to carry out credit activities using the ICE8000 international credit standard, and accept the strict supervision of the World Credit Organization (WCO). Because the ICE8000 system is very large and covers almost all credit services, ICE8000 credit institutions often choose one or two credit services as their main business out of professional considerations. At the same time, the development of the credit evaluation industry has further stimulated the development of credit transactions characterized by credit sales, and the development of credit transactions has resulted in more extended services and credit institutions providing extended services in the credit evaluation industry. Account collection, commercial account factoring, credit insurance, credit guarantee, credit training, credit management consulting, etc.

2.1.2 The emergence and development of my country's credit evaluation industry

During the Yuan Dynasty, in the urban areas of our country, there were some institutions and personnel specialized in providing investigation services for businessmen, often named "Bai Pao Tang" and so on. There is little demand for survey services and no industry has formed. It was not until 1932 in Shanghai that there was a real credit institution—the China Credit Bureau, which was jointly established by Mr. Zhang Naiqi of Zhejiang Industrial Bank and Mr. Zi Yaohua of Shanghai Commercial Savings Bank. It was founded in June 1932. It officially opened on the 6th, with Mr. Zhang Naiqi as the chairman, and the registered address is No. 133, Yuanmingyuan Road, Shanghai.

At the peak of business development, the number of employees of China Credit Bureau was as high as 90. The China Credit Information Service is a corporate credit investigation company. It provides three main services: one is the investigation of the history and current situation of the enterprise; the other is the investigation of the general economic and financial situation; the third is the market research. In 1935, Mr. Zhang Naiqi was arrested by the Kuomintang government along with Shen Junru and others for participating in the "Shanghai Salvation of the National Congress". This is the famous "Seven Gentlemen Incident" in modern history. After the victory of the Anti-Japanese War, China Credit Bureau resumed business in Shanghai. It wasn't until 1949 that the credit bureau officially went out of business.

After my country's socialist transformation, the planned economic system does not require the existence of credit evaluation industry. After the reform and opening up, especially since 1992, according to the needs of economic development, credit investigation agencies emerged again. However, due to the restrictions of laws and administrative concepts at that time, credit companies could not be officially registered. These early credit institutions all existed as management, consulting, and information service companies, and there were also several credit institutions named after credit, which were all invested and approved by government agencies. In 2002, the Party Central Committee and the State Council put forward the strategic goal of establishing a social credit system. For a while, integrity and credit became a hot topic in society. Many people of insight began to invest in the credit evaluation industry. or credit named sites. However, the long-term concept of planned economy believes that credit evaluation is a matter of the state, and enterprises, especially private enterprises, have no right to intervene. Therefore, it was not until May 2004, before the implementation of the "Administrative Licensing Law of the People's Republic of China", that my country established the first The first privately-run credit rating agency: Henriette (Beijing) Credit Rating Firm.

Although the credit evaluation industry in China is still in its infancy, a number of outstanding credit companies have emerged. Their pioneering spirit promotes the development of China's credit evaluation industry, such as: Jincheng International, Boshengtong Management Consulting, Sinotrust, Huaxia Credit, Hisun Credit, Zhongjinguan Credit, CICC Credit, etc.

2.1.3 Development prospects of the credit evaluation industry

1. The market potential of the credit evaluation industry is huge.

The principle of economics tells us that if there is a demand, there must be a market, and the market will be as big as the demand. Because the credit evaluation industry can directly meet the following four major needs, the market capacity of the credit evaluation industry is very large. Take the Dun & Bradstreet Group as an example. By the end of 1997, the global annual output value of the Dun & Bradstreet Group was about 5 billion US dollars. It employs 80,000 people worldwide. With the further development of the market economy, with the continuous improvement of the ICE8000 credit standard, and with the emergence of the boosting effect of the ICE8000 credit standard on the credit evaluation industry, all units and individuals are the customer base of the credit evaluation industry. The annual market of China alone is more than one trillion yuan.

1. The need to safeguard legitimate rights and interests.

People are often deceived for various reasons. In addition to using legal means, people can use credit tools (such as: credit commercial account collection, credit supervision, etc.) through credit institutions to protect their legitimate rights and interests.

2. The need to prevent and control the risk of dishonesty.

No matter how firm the integrity values and the strong will of the top management of an organization, if there is no scientific management mechanism, credit tools (such as credit investigation, credit analysis, contract credit evaluation, dishonesty punishment mechanism, Dispute resolution mechanism, information transmission mechanism, integrity management consulting, etc.), he cannot effectively prevent and control the risk of the organization's own dishonesty (such as: internal employees or successors appear to be dishonest), let alone effectively prevent and control the organization's external dishonesty. Risk of behavioral abuse. Based on this, more and more honest bosses will seek credit institutions to help them establish a scientific management mechanism or purchase credit products from credit institutions to prevent and control the risk of dishonesty for themselves or their partners.

3. Lixin needs, that is, the needs to improve, prove and accumulate their own credibility.

Everyone is willing to deal with honest organizations and individuals, and everyone is unwilling to be deceived, which makes the need to prove credibility very high. Units and individuals with good faith will often wish to improve, prove and accumulate their own credibility. When there is a crisis of trust in the industry or society, if the trustworthy needs of honest people cannot be met, they will bear the bitter fruit of dishonesty caused by the dishonesty together with the dishonesty. We believe that more and more wise and honest people will discover their needs and seek to satisfy them.

4. The need to resolve credit disputes.

Even if both parties have the willingness to be honest and objectively follow the principle of honesty, subjective disputes are still hard to avoid. Once a credit dispute occurs, people need a convenient, fair and just dispute resolution channel. The dispute handling mechanism of the ICE8000 system can meet people's needs.

Second, the credit evaluation industry has a long life cycle and can exist for a long time.

Many products and services have a life cycle. For example, BP machines were once all the rage, but they were withdrawn from the market because of the popularity of mobile phones.

We can analyze the life cycle of the credit evaluation industry. The market economy is a social and economic system that better allocates social resources. Most countries in the world will adopt this system, and the market economy system will not change in hundreds of years will quit. As long as there is a market economy, there will be asymmetry of transaction information. As long as there is asymmetry of transaction information, there will be liars. As long as there are liars, the society needs credit evaluation industry. Therefore, the life cycle of the credit evaluation industry is as long as the market economic system, and has unlimited development prospects as the market economic system. Practitioners in the credit evaluation industry don't have to worry about: unemployment due to the non-existence of the industry. At the same time, based on the scientific nature and international universality of ICE8000, the existence of the ICE8000 system will make the development of the entire credit rating industry healthier.

The above content is excerpted from "Introduction to ICE8000 Credit Knowledge" (written by Fang Bangjian, free to use, but please indicate the source)