REFERENCES TERMS SELECTION OF COMPANIES TO BE APPROVED AS REGIONAL CREDIT BUREAU IN THE EIGHT STATES OF THE WEST AFRICAN MONETARY UNION (UMOA)

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1 Directorate General of Administration and Heritage Department of Administrative Affairs REFERENCES TERMS SELECTION OF COMPANIES TO BE APPROVED AS REGIONAL CREDIT BUREAU IN THE EIGHT STATES OF THE WEST AFRICAN MONETARY UNION (UMOA) APRIL 2014 Avenue Abdoulaye FADIGA BP 3108 Dakar Sénégal Tel. (221) / Fax. (221)

2 2 TABLE OF CONTENTS Page ACCRONYMS AND ABBREVIATIONS... 4 PART ONE: GENERAL PROVISIONS... 5 I PROJECT OBJECTIVES... 6 II EXPERTISE OF TENDERERS... 7 III DESCRIPTION OF THE COMPUTER SYSTEM... 7 IV OUTLOOK ON THE CREDIT MARKET AND ON CREDIT INFORMATION SHARING WITHIN THEUMOA... V REGULATORY FRAMEWORK OF CREDIT INFORMATION SHARING IN THE UMOA... VI USING AND DISCLOSING CONFIDENTIAL INFORMATION 10 VII SETTLEMENT OF DISPUTES PART TWO: REQUIREMENTS OF THE CALL FOR EXPRESSION OF INTEREST I TECHNICAL PROPOSAL Experience and basic conditions Local support partners Credit Reporting Systems Project Implementation Approach Documentation Project Planning Project Management Training II TECHNICAL AND OPERATIONAL SPECIFICATIONS OF THE COMPUTING SOLUTION General Description of the Solution Business Architecture System Features Credit Enquiries Access Types Inquiry Access Match and Merging Rules Inquiry Input Fields Creating New Consumers Records Names and Addresses Application Security Database Content Data Maintenance application Billing System Standard System Reports and Data Presentation Facilities Network and Communications Overview

3 Data Center security policies Encrypting Data during Information Transfer After Sales Technical Support and Maintenance III FINANCIAL MEANS FOR ESTABLISHING A PRIVATE CREDIT BUREAU Financial Terms of Proposal Interest in the Capital PART THREE: TERMS AND CONDITIONS OF TENDER I PRESENTATION OF TENDERS II DEADLINE FOR SUBMISSION OF TENDERS III VALIDITY OF TENDERS IV AWARD PROCESS V SITE VISITS VI- OFFICIAL CONFIRMATION TO SUCCESSFUL TENDERER VII COMPANY CONTRACT AND SHAREHOLDERS AGREEMENT VIII SUBMISSION OF APPLICATION FOR PCB LICENSING 26 IX ADDITIONAL INFORMATION APPENDICES APPENDIX 1: Instructions to tenderers APPENDIX 2: Tender Letter APPENDIX 3: Non-Disclosure Agreement APPENDIX 4: Affidavit Form APPENDIX 5: References to a Similar Experience APPENDIX 6: Information on the Members of the Candidates Consortium APPENDIX 7: Evaluation Criteria APPENDIX 8: Datasheet APPENDIX 9: Selection Criteria for Site Visits APPENDIX 10: Management Advisory Services APPENDIX 11: Tender Form for a Financing Proposal APPENDIX 12: Law on the Regulations of Credit Bureaus in the Member States of the UMOA APPENDIX 13: Law on Banking Regulations APPENDIX 14: Law on the Regulations of Micro-finance institutions APPENDIX 15: Architecture of the Bounced Checks file (Centrale des Incidents de paiements) APPENDIX 16: Architecture of the Balance Sheets File (Centrale des Bilans des entreprises non financières) APPENDIX 17: Outlook on the potential of the market of credit information sharing in the UMOA

4 4 ACCRONYMS AND ABBREVIATIONS BCEAO or Central Bank : Central Bank of West African States CCJA : Common Court of Justice and Arbitration DAA: Department of Administrative Affairs MFI : Micro finance-institutions DR : Disaster Recovery EIG : Economic Interest Group EU : European Union CFA Franc : Currency of the UMOA Zone OHADA: Organization for the Harmonization of Business Law in Africa PCB : Private Credit Bureau PCR : Public Credit Registry PR : Public Relations SCIE-SA: Société de Commercialisation des Informations d'entreprises UEMOA: West African Economic and Monetary Union UMOA : West African Monetary Union

5 5 PART ONE: GENERAL PROVISIONS The Central Bank of West African States (BCEAO) is a public international institution created by the member States of the Union Monétaire Ouest Africaine (UMOA). It enjoys full legal status and financial independence, as well as the capacity to enter into contracts, acquire or dispose of personal and landed property and go to court. To this end, it enjoys in each one of the member States of the UMOA the most extensive legal capacity granted to legal entities. The fundamental mission of the BCEAO is as follows: Defining and implementing the monetary policy of the UMOA; Seeing to the stability of the banking and financial system of the UMOA ; Promoting a smooth operation and providing supervision and security for the payment systems in the UMOA; Implementing the exchange policy of the UMOA, under the conditions fixed by the Council of Ministers; Managing the official foreign exchange reserves of the member States of the UMOA. In accordance with the provisions of the Uniform Law on the Regulations of PCBs in the Member States of the UMOA (see appendix 12), the BCEAO is appointed as the supervising body of Private Credit Bureaus (PCB hereinafter) within the UMOA. As such, the BCEAO is the only body officially authorized to license Private Credit Bureaus prior to their exercising this activity within the UMOA. The approval is pronounced by order of the Finance Minister in the State of the head office of the tendering company, after assent of the BCEAO. Sharing credit information will be implemented according to the indirect model of information sharing, i.e. the BCEAO will be the interface between regulated financial entities (banks and Micro-finance institutions) and the PCBs, by supplying: Historical data to the PCBs from the very beginning of their operation; Monthly updates on all the loans, which all regulated entities must automatically transmit to the BCEAO. Non-regulated entities, may participate to the PCB by supplying data directly to the PCB/s, as indicated in the figure, in accordance with the principle of reciprocity. Private Credit Bureaus will function as for profit commercial entities, while meeting needs and expectations as far as the public services of various stakeholders and users are concerned. PCBs will invoice users for information services supplied, according to a tariff matrix ratified by the Central Bank. On that basis, tenderers are expected to propose for the assessment of the BCEAO, a proposal including a business plan for their project, and a billing system. It is implied that the technological choice proposed by the tenderers must be compatible with the equipment they expect to use. After being shortlisted by the BCEAO, approved tenderers will need to set up a legal entity in the form of a public limited company with fixed capital (société anonyme à capital fixe). This entity must have its head office on the territory of one of the member States of the UMOA. It must also be physically present in each State either through a representative office, a branch or a subsidiary.

6 6 In accordance with the provisions of Articles 18 and 19 of the Uniform Law on the Regulations of PCBs in the Member States of the UMOA, the share capital of the company to be created must be paid up on the day the PCB is licensed, up to the minimum amount required in the licensing decision, or five hundred million ( ) XOF. While the capital can be open to as well as users and data providers 1 of credit data, the latter cannot directly or indirectly own shares exceeding forty-nine per cent (49%) of the PCB capital. Licensed PCBS shall fully conform to the strictest security requirements employed by the international credit reporting 2 industry, as well as to the legal statutory provision on consumer protection and borrowers privacy. Licensed PCBS shall also conform to the provision of the Uniform Law that regulates PCBs in the member states of the UMOA, as well as those that regulate banks and MFIs operations in the UEMOA. In fact, though PCBs shall not be considered as part of the banking or MFIs industries, which are regulated by the above mentioned specific laws, the PCBs will collect, and process personal information provided especially from banks and microfinance institutions and will be, in this context, submitted to the measures of these laws. I PROJECT OBJECTIVES The BCEAO is soliciting proposals from technological and strategic investors having knowhow, experience and proven capacity to establish, operate and manage modular state-of-theart credit reporting systems, based on international best practice, that can be scaled in the future to fit additional sophisticated functionalities, according to the best international practices taking into account the growing needs of the financial markets of the UMOA. The end result of this exercise is the selection of one or more technical and strategic providers that will work to develop and customize a private regional credit reporting system to the UMOA environment. The system must be developed following on best international practice, will be based on the Hub and Spokes model 3, with one system/platform located in one of the member states of the UMOA, from where it will service all the credit industries of all the states members. The mission of future PCBs will be to supply users, through the most advanced existing technologies, credit information services (e.g. credit reports with full credit histories), and, decision support services (e.g. scoring) relating to credit granting, marketing information services (e.g. geo-demographic segmentation, profiling etc.), and other Value Added Services, authorized in accordance with the Uniform Law on the Regulations of PCBs in the Member States of the UMOA. 1 User or data user: Any credit institution or MFIs or any other data supplier being entitled to access the database of the Credit Bureau in accordance with an existing service contract with that Credit Bureau, so as to obtain credit reports and other services in accordance with the provisions set out in the Uniform Law on the Regulations of Private Credit Bureaus in the Member States of the UMOA. Data providers: banks, Micro-finance institutions, other financial institutions, other financial or non-financial and commercial lenders, utilities and fixed/ mobile telephone operators, water and electricity companies, as well as any other private institutions or public structures (courts of law, managers of public registries, etc.) that supply the Credit Bureau with information linked to the payment history of a natural person or legal entity, established in the member States of the UMOA, or other data ( e.g. demographic). 2 Credit reporting is a mechanism making it possible to gather credit information, process this information and develop value added services from it. 3 Architecture implementing (operating) a central point of connection which can reach (affect) endings situated in the periphery (outskirts).

7 7 Data dissemination by PCBs will be carried out using any technological means, electronic instrument or computer-based data processing system, via public or private telecommunications networks that must meet the high data security standards, confidentiality and protection provisions, including personal data, and integrity provisions provided for by the Uniform Law on the Regulations of PCBs in the UMOA. The mission of licensed entities will be to develop and operate a modern Private Credit Bureau in the member States of the UMOA, in accordance with the statutory provisions in force therein, particularly the Uniform Law on the Regulations of PCBs in the said States. A copy of the abovementioned uniform law is annexed hereto (APPENDIX 12). The PCB system must be able to supply complete and modern credit reporting services, and be in a position to support all the lending institutions in the UMOA, whether these are financial or non-financial institutions, supervised or not by the Central Bank, for credit risk assessment and monitoring purposes throughout the member States of the UMOA. The credit information 4 sharing system proposed by the tenderer must be able to process positive data (i.e. information on borrowers credits outstanding.) as well as negative data (i.e. data relating to borrower s negative behavior, payment defaults, courts judgments, derogatory information, etc.) obtained from banks, financial institutions 5 and non-banking institutions (i.e. microfinance institutions, telecommunication companies, retailers, utilities companies, etc.). II EXPERTISE OF TENDERERS The tenderer must have proper expertise as well as known-how and solid experience in the international credit reporting industry, particularly in similar emerging markets. It must also be able to prove that it benefits from credibility, is financially healthy, has a good reputation, and it is able to offer expertise, support and maintenance. III DESCRIPTION OF THE COMPUTER SYSTEM The required system will need to process data in French and Portuguese, with the reports, tables and other generated documents of the operating system of the PCB displayed in French in all eight (8) member countries of the UMOA, and also in Portuguese in Guinea-Bissau. The system must be able to process positive as well as negative data obtained from an array of PCB suppliers, regulated and non-regulated, such as banks, MFI (particularly those aimed at in Article 44 of the law on MFI regulations), leasing companies, mobile telephone operators, public data 6 suppliers etc. (this list is non-exhaustive). Tenderers are encouraged to propose high quality and efficient solutions, based on similar prior experiences. The system database will have to meet the following essential operating principles: Open regional database: The database will have no vertical separation based on State, geography, territory, jurisdiction, credit or lender type. It will be populated by all the data on all loans supplied by all the lenders (users, data providers) of the eight (8) member States 4 Credit information : information concerning credit history, the payment history of a natural person or a legal entity, including its repayment behaviour, credit risks level, lending volumes, maturity, terms and conditions, reimbursement pattern, guarantees and all other financial commitments, making it possible to determine, at any time, the global financial situation and the exposure of the natural person or legal entity concerned. 5 Financial institutions are natural persons or legal entities, other than banks, that make it their usual business to carry out, in their own name, lending and credit granting services in general 6 Public data: registries, archives, lists, rolls or other data gathered, kept, processed and held by a public agency or body organisation, where the public nature and permanent accessibility to the public of this organisation are guaranteed by law.

8 8 of the UMOA, irrespective of the country of origin of these data ; Horizontal participation: The database will be made up of the data contributions of all the data providers (supervised and non-supervised entities). However, only supervised entities (banks and MFI, Article 44) will take part, during a first phase, in the credit information exchange system ; Cross-border enquiries: Inquiries will be allowed to any subscriber resident in one of the 8 UEMOA countries having signed an agreement with the PCB and being a data provider, regardless of their location, and providing the totality of its loans portfolio data to the RCBP ; Exhaustiveness of information and services: Credit reports shall include the whole credit history of the subject of information related to the completeness of his/her lines of credit regardless of where the loan has been granted/originated (e.g. a subscriber in Senegal will receive a credit report on a borrower which shall include all the lines of credit that the said borrower holds in any and all of the UEMOA different countries, therefore a regional credit report ). Additional Value Added Services will be developed and distributed based on the same principle ; Compulsory sharing (and requesting) of information: All financial institutions supervised by the BCEAO in the eight (8) member States of the UMOA, particularly credit institutions and large MFIs (Article 44), are mandated to periodically supply the licensed PCBs with all their loans data in their credit portfolio. They are also mandated to inquiry a PCB for the purpose of obtaining a credit report before granting a loan to a borrower, provided that a prior, free and written consent has been given by the concerned borrower. Non-supervised entities can take part in the credit information sharing system, according to the reciprocity principle. In a nutshell, the system will be based on one, single, common, regional, open database; transparent to all users and borrowers regardless of the territory they live and /or operate. BCEAO intends to favor larger credit access as well as increase the opportunities for people mobility and flows of data, capital, and access to credit in the UEMOA. The legislation enforced, contains all the necessary provisions to allow the above sharing scheme. IV - OUTLOOK ON THE CREDIT MARKET AND ON CREDIT INFORMATION SHARING WITHIN THE UMOA Currently, the only source of information on loans available to lenders within the UMOA is represented by BCEAO s Public Credit Registry. Centralizing data about banks risks was instituted in the UMOA in pursuance of a regulation established in Its objective is mainly to: Provide the monetary authorities with relevant data to perform the institutional task of supervising the region credit risk and industry ; Support the lending industry in assessing borrowers risk and decreasing information asymmetry. Banks and other regulated financial institutions are mandated to share with the Central Bank s Public Credit Registry, by the 20 th of each month at the latest, all the data concerning the loans granted during the previous month and which exceed a threshold determined by the State.

9 9 The notification thresholds in force, to share data with the credit registry, are 10 million XOF for banks and 5 million XOF for financial institutions in Côte d'ivoire and Senegal, 3 million XOF for banks and 2 million XOF for financial institutions in Guinea Bissau, 5 million XOF and 2 million XOF respectively for banks and financial institutions in the other States of the Union. Risk notifications are individual and, after the first declaration, report all utilizations even if blow the thresholds. The list of registered borrowers is kept in each National Directorate of the BCEAO. It is composed by aggregated data as well as the borrower s registration number in the PCR. Centralizing risks consists in consolidating credit lines with the objective of aggregating risk exposures by activity / sector. The BCEAO keeps in its public credit register (end of June 2013) data on the credit facilities concerning 161,971 borrowers, representing a total outstanding debt of 7,040.7 billion XOF, i.e. 77.1% of the loans to the economy distributed in the Union. Information is fed back to data providers institutions by returning the consolidated data segregated at country level (not a regional level), by electronic file, to each credit institution in the said country, through the National Direction. No microfinance institutions are currently sharing data and taking part in the system for centralizing banking risk. Other databases relevant to the future activity of the PCB, currently operated by the BCEAO, are: The bounced checks file ; The file of Balance Sheet file concerning non-financial companies in the UMOA ; The file Agreement of classification a rating of the bank s exposure assigned by the BCEAO to each credit line, individually on the bank s request. In 2012, the entire banking sector of the eight (8) States granted 743,323 loans (across all credit lines). The microfinance sector granted 1,397,847 loans. The mobile telephony sector is characterized, at UMOA level, by the preponderance of prepaid contracts compared to post-paid contracts. Indeed, prepaid contracts represent at least 98% of the market in this sector. On the contrary, the fixed telephony sector is characterized by the predominance of post-paid contracts which reach 66% of the market in this sector, for example in a country like Benin. Concerning utilities companies (e.g. water and electricity), these are characterized by the predominance of post-paid contracts. A summary of the foreseeable evolution of the credit market can be found in APPENDIX 17 hereto. V - REGULATORY FRAMEWORK OF CREDIT INFORMATION SHARING WITHIN THE UMOA The Council of Ministers of the UMOA adopted in June 2013 a uniform law on the regulation of PCBs in the member States of the UMOA. This establishes the legal framework for the constitution, operations, and supervision of the PCBs in these States. The law is based on the key principles of reciprocity, confidentiality as well as the explicit and prior consent of the natural persons and legal entities on which credit information is shared. It

10 10 gives great importance to the protection of consumers rights, by highlighting in particular the principle of prior consent of the consumer, before any information concerning the consumers is collected or disseminated by the PCB. It strikes an appropriate balance between the lenders ability to share information on credit and the individuals right to confidentiality. The uniform law will have to be transposed into the national legislation of each member country of the UMOA. The law creates the framework for a flexible and modern regulatory environment, applicable to the establishment of a private credit reporting system, through sound conditions for a healthy commercial development. In this regard, it must be specified that, among other things, the law establishes that: Users and/or data providers share in the capital of a PCB cannot exceed forty-nine per cent (49%) of the capital of the PCB (Article 19); Banks and Micro-finance institutions which are subjected to the control and supervision of the BCEAO and the Banking Commission of the UMOA, are mandated to (Article 60): For the purpose of risk assessment always make an inquiry to the PCB for the purposes of obtaining a credit report before granting a loan to a client provided that a prior, free and written consent has been given by the client concerned; Display the requested credit report in the file of each client applying for credit, Share with at least one PCB all the loans in their portfolio; The credit report provided to a borrower by the PCB must be worded in a manner which is clear, complete and accessible. The report must be sent to the client within five (5) working days maximum from the date on which the PCB received the client s request, and free of charge once a year (Article 46). A copy of the Uniform Law on the Regulations of PCBs in the Member States of the UMOA is enclosed with this request for proposal (APPENDIX 12). Moreover, it must be specified that laws relating to the protection of individuals personal data, (Privacy Laws) showing a legislative structure similar to the related directive of the European Union (EU), are in force in four (4) States of the UMOA, (i.e. Benin, Burkina Faso, Côte d'ivoire and Senegal). The identification of natural persons, in each member country of the UMOA, is carried out by the Ministry of Territorial Administration, which issues a national identification card with a unique and universal identification number. However, there is no regional citizen identification system at the level of the UMOA. VI USING AND DISCLOSING CONFIDENTIAL INFORMATION Information appearing on this document is confidential and is the property of the BCEAO. Replies to this call for expression of interest must include the acknowledgement of receipt in APPENDIX 3 (Non-Disclosure Agreement). Tenderers must read, sign and return the Non- Disclosure Agreement with their tender.

11 11 The BCEAO trusts that all information supplied by the candidates is submitted in good faith, expects that the information is accurate and that the candidate will supply the solution and services within the given deadline. The BCEAO reserves the right to use the information submitted in response to this document in whichever way it deems fit, subject to the provisions of the Non-Disclosure Agreement aimed at in APPENDIX 3 of this request for proposal. The publication of this request for proposal and the reception of the data and information in response to this document must not, in any way whatsoever, lead the BCEAO to incur any liability, financial or otherwise. The BCEAO in no way undertakes to reimburse or compensate in any other way any candidate for the losses or expenses incurred in relation to the response of the candidates to this document. VII SETTLEMENT OF DISPUTES Any relation started within the framework of this request for proposal will be subject to the enactments and regulations in force in the Republic of Senegal. The BCEAO and the candidates will endeavor in good faith to resolve any arising disagreement or dispute in accordance with the Non-Disclosure Agreement by reaching an amicable settlement. Failing an amicable settlement, all arising disputes will in the end be submitted to arbitration, according to the Arbitration Regulations of the Common Court of Justice and Arbitration (CCJA) of the Organization for the Harmonization of Business Law in Africa (OHADA), by one (1) arbitrator appointed in conformity with these Regulations. Arbitration takes place in Dakar in the Republic of Senegal, and in the French language.

12 12 PART TWO: REQUIREMENTS OF THE CALL FOR EXPRESSION OF INTEREST I TECHNICAL PROPOSAL Experience and basic requirements a)tenderers must have executed successfully at least two (2) developments and have implemented credit information sharing systems or similar projects (Private Credit Bureau or Public Credit Registry) during the last ten (10) years. b)the abovementioned developments must include the participation of non-regulated entities as suppliers/users of system data, including at least telecommunications operators and/or water and electricity companies. (The BCEAO must be able to verify the quality of applications to be developed by the PCBs). c)tenderers must own, manage directly, or be delegated to operate and maintain, on the date of submission of their proposal, at least one (1) operational site (PCB or PCR) in service on that date in another country. d)tenderers must be willing to hold the majority of the share capital of the PCB if necessary. e)tenderers must prove their experience in providing and upgrading technological services comparable to those required within the framework of a PCB operation, as well as other value added services (e.g. bureau scores, scoring, alerts, etc.). f)the appointed project manager must have an experience of at least ten (10) years in the development and implementation of credit reporting applications. g)each of the appointed analysts must have an experience of five (5) years in programming, system analysis and system engineering in the field of credit reporting. h)tenderers must have a proven capacity to establish and manage a support center based in the UMOA that can offer support 24 hours a day, 7 days a week to the users/data providers. i)tenderers must have experience in data warehousing and credit risk analysis. j)tenderers must have a recognized knowledge of the best international legal practices concerning privacy and personal information confidentiality, and must be able to manage issues ensuing from the application of the regulations or laws relating to credit reporting. k)tenderers must provide key technical staff that can speak French fluently, available throughout all the project phases. Knowing and/or mastering the Portuguese language is a plus Providers are required to describe their experience in establishing and managing the operations of an independent PCB organization. Vendors must be clear and specific in their representation of previous experience, whether their role was: as an information provider (PCB) in its own right; or only providing software developed and deployed by them; or as a partner in a consortium and their specific responsibilities (e.g. as a related party to another vendor which was responsible for developing and deploying the software solution and whether that was utilizing common branding); or

13 13 as a member of a consortium where another partner s software solution was deployed; or simply providing consultancy services. NOTE: All claims by vendors as to previous experience will be independently verified and if found to be inaccurate, they may cause the proposal to be disqualified. Every candidate must supply in particular a summary of their expertise and capacity to execute the following actions: Establishing Operations, Processes and Functional Organization The successful candidate will work with data providers and users, as well as the BCEAO in order to establish the operational model, the processes and the functional organization of the PCB. Tenderers will have to prove their knowledge and prior experience as regards the successful management of the daily activities of a PCB organization on an emerging or developing market Establishing the Technical Infrastructure and the Company Candidates must describe the conditions of their involvement in the establishment of the technical infrastructure. Candidates must also define clearly their potential role in establishing the operational Transferring Management Skills The successful candidate will need to prove its commitment to transfer the management skills and know-how to the personnel of its potential subsidiary operating in the Union, and must propose a program and a schedule to achieve this Managing the PCB Candidates will have to propose their methods and plans concerning the management of the daily operations of the PCB, particularly as regards the transfer of skills to the human resources of the UMOA (cf. APPENDIX 10) Local support partners It is anticipated that to successfully implement the credit bureau project in a timely manner it may be necessary for the technology and strategic (equity) partner to cooperate with local partners. In this case, please identify any local UEMOA or other sub-contractors, providing technological and maintenance support, local expertise and presence in the project, if any. (cf. APPENDIX 6) Credit Reporting Systems Tenderers must provide an overview of the proposed PCB system. BCEAO is seeking to license a modern, flexible, scalable PCB solution that delivers full trade-line history (with positive and negative data) for consumer, SME, and corporate credit, from all sectors of the credit industry and similar services/sectors, through which end-users can assess risk on the following typologies of credit, though not limited to: Personal Loans ; Group loans ;

14 14 Consumer Credit ; Credit Cards ; Mortgages ; Leasing ; Utilities ; Commercial Loans ; Term Loans ; MFI loans (group and individual loans) ; Trade credit ; Corporate ; SME. The information exchange system must rely on principles of confidentiality, reciprocity and privacy. It must be able to serve not only the banking sector, but also non-banking financial institutions, micro-finance institutions, leasing companies, insurance companies, telecommunication companies and other public utilities that could be authorized to take part in the information exchange system, when necessary. As the long-term success and efficiency of the credit bureau depends more on the operational/ organizational rules and principles, than on the actual technological solution, the vendor/potential partner would be expected to be able to provide extensive services and know-how in all of the following technical and or business areas: PCB system development (technological solution) ; Current updates and upgrades of the PCB technological solution ; Maintenance and operational support ; Establishment of technical infrastructure of the project, with the supply in particular of an emergency backup facility (reestablishment of the service within 24 hours the system must be housed in one of the member States of the Union) ; support and advice in data center technical and operational setup ; operation and management of the PCB, support, know-how and documentation transfer in PCB operations ; legislation support (personal data protection, consumer protection, etc.) ; training for both bureau staff and end users ; development of additional Value Added Services as the UMOA market matures. Vendors must confirm whether their organization holds all of the above mentioned capabilities Project Implementation Approach It is acknowledged that credit bureau implementation and ongoing operations is a very demanding and specialized activity, which requires a combination of proprietary skills and experience in the areas of: consumer and commercial finance ;

15 15 credit reporting and financial industry legislation on a local and worldwide basis ; personal data/consumer protection and other legal compliance ; anti-monopoly laws ; public relations and media coverage crisis management ; data processing center management ; operational support of credit bureau (rules and procedures; documentation and training) ; overall corporate managerial capabilities ; I/T project management ; software development/maintenance and provision of continuous evolution of solutions as technology changes and business needs dictate. BCEAO wishes to adopt a phased approach to meet market demands by delivering a regional consumer and commercial credit bureau as soon as practical, without compromising good project and program management protocols. Three project implementation phases are planned, as follows: Phase I This is a key phase that includes developing the technical infrastructure required for exploiting the technological solution of the PCB (data analysis, input file format, design of database, development of application program, hardware, and communications, etc.). Banks and large microfinance institutions (those aimed at in Article 44 of the Law on the MFI regulations of the UMOA) will supply the PCB with the required information as soon as it begins its activities, while telecommunication users and small microfinance institutions, public utilities, etc. will join in subsequent phases, according to the market reaction. It is possible that certain data providers require advisory services, assistance or even a solution supplied by the PCBs so as to extract and/or prepare the input data file in accordance with the desired input format (e.g. MFI). Successful candidates must possess and offer this capability, if required by data providers (at a separate cost not included in the cost of this project, paid individually by the data providers). Creating interfaces with two (2) databases will be required, (the Bounced Checks file and the Balance Sheets file) managed by the BCEAO. The candidate must be able to prove its capability in this regard. It could be necessary to create interfaces with other external databases (e.g. public data). Although the availability and the schedule of this access still need to be defined, the candidate must prove its prior experience in this regard. Phase II Activities in the second phase will include the following (but not be limited to) : System implementation ; Assistance, support and training of data contributors with the cleansing of data ; Upload of positive and negative consumer/commercial data from all members to populate the database as initial contribution ;

16 16 Upload of payment history data from those members which have the infrastructure to deliver history data ; Interface to other 3 rd party databases that have value added data ; User acceptance test ; Documentation (end user guide, product guide, consumer access and dispute resolution processes and procedures, back office operation, technical manual, training manuals, etc.) ; Users training and outreach, knowledge transfer. Phase III Based on the maturity and the needs of the market, the provider is expected to be able to develop and offer in the future and in a phased manner, the following Value Added Services (not an exhaustive list) : Credit Bureau Scores ; Anti-fraud systems ; Identity verification ; Basel II/III Models ; Historical & Behavior Statistics ; Application Processing ; Portfolio monitoring/ analysis ; Early warning tools ; Tracing ; Others ; Tracing borrowers behavior. Vendors are therefore expected to demonstrate the capability and necessary previous experience to develop and offer other additional Value Added Services, on a rolling basis as potential, future, separate projects according to the maturity/demand/needs of the market, ensuring continuity to the PCB activity. Though Phase III is not part of the RFP scope and of the current project, vendors should provide information on the range of products that they are able to develop in-house and deliver, as well as references on those products that are currently used, and where, or detailed information on the vendors agreements in place to provide the same services, in case these services are not developed in-house by the vendor. 1.5 Documentation Candidates must indicate which support documentation will be produced, particularly technical documents, operation manuals, training manuals and user s guides. All the documents will have to be made available in French and Portuguese, in printed and electronic formats. Candidates must describe the way in which the documentation will be kept current and updated.

17 Project Planning Candidates must supply a detailed provisional project planning, including a schedule listing all the activities required for completion of the project, including key milestones and secondary activities, allocated resources, the dates at which tasks will be expected to begin and end, as well as due dates, by identifying critical points. A detailed test plan and test scripts, to be developed and carried out by the vendor, are also part of the plan and part of the acceptance process. 1.7 Project Management Candidates must identify key employees and profiles who will be appointed to carry out these tasks, with a view to consolidating the execution of this project. Complete Curricula Vitae (CV) must be supplied for all the key members of the project team and the profiles must meet the prerequisites indicated in Paragraph 1.1 of this Request for Proposal. 1.8 Training Candidates must formulate recommendations and outline a plan detailing the training they intend to offer as part of the deliverables (including the training program, the documentation, the manuals, the schedule, etc.), which is intended for the following targets: The personnel of the PCB ; The final users/data providers ; The teams of the BCEAO in charge of supervising the information exchange system. The training would include materials covering the bureau s operation, technical as well as sales and marketing. II TECHNICAL AND OPERATIONAL SPECIFICATIONS OF THE SYSTEM 2.1 General Description of the Solution In order to operate an efficient information sharing system, the PCB must be equipped with a software solution (implemented with the appropriate hardware systems) that can accomplish the tasks of collecting, processing and distributing credit information that was contributed and retrieved by users/data providers (private and/or public sources) operating in the eight (8) member States of the UMOA, with a unique platform located in one of these States. To this end, a full Web-based operational credit reporting system, reflecting the following operational configuration must be supplied: Robust, flexible and highly expandable computer systems, to meet the needs of the users or the financial sector members; Allowing high-speed processing and distribution of data, between the PCB and the users, with the objective of processing/redistributing the received information with a quick turnaround to be indicated in the proposal; High security standards concerning data storage and processing of information; Backup system with sufficient redundancy to guarantee uninterrupted services, even in the event of disaster, whether natural or caused deliberately (DOS-type attacks). The candidate must illustrate in detail the essential elements and functionalities of the application solution to be delivered as part of the credit reporting system during the mentioned

18 18 Phases I, II The system high level capabilities required for the delivery of services to users/data providers, must include the following elements: Upload positive and negative data as submitted by data providers in the eight (8) member States of the UMOA ; Adaptation/customization of application programs, particularly help text and the entire documentation, must be in French and Portuguese ; Names and addresses will be in French and Portuguese (in one country), as submitted by the data providers, and match logic should enable to match the same entity from the data in French or Portuguese supplied by different data sources ; Establishment of an emergency warm backup facility located within the UMOA ; Generation of billing files to be imported in an accounting software package ; Sophisticated facility to manage disputes or enquiries from the public concerning their data ; Sub 5 second system-time response to all credit inquiry transactions ; Warning system to notify members of address changes, new enquiries, failures, etc. In order to deal with exceptional situations, the server must be able to supply information via voice mailbox and via GPRS, USSD, SMS data etc. Tenderers are invited to list any third party software program that will be part of the solution proposed. 2.2 Business Architecture Tenderers are invited to describe in detail the core credit reporting system, including Web servers, application servers, database server, security services, and the following elements in particular: Clients access to the Web ; Batch processing ; Business to Business (B2B) access ; Design of data center (design of the production environment, development/test environment, disaster recovery infrastructure, firewalls, etc.) ; Security architecture (particularly the perimeter security including the hardware and software, firewalls, demilitarized zone (DMZ), intrusion detection system, etc.) ; Network architecture (load balancing and performance management capacities, minimum bandwidth for Internet and host-to-host connections, etc.) ; Technical architecture (recommended server configuration, operating system and relational data base management system, etc.) ; Clients access network ; Web Reporting (list of reports available and examples of the same) ; Report generator for the generation of reports ;

19 19 Billing ; Data load (methodology, validation and auditing processes, member updates, both regular and emergency) ; Customer Service: bureau back office and help desk processes (including the internal recording of file notes, etc.) when dealing with data quality issues or other disputes raised by the public ; Administration: Bureau and data centre interaction with applications to control the configuration and operation of sub-systems ; On line inquiry tools. 2.3 System Features Tenderers are invited to describe in detail the functionalities of the credit reporting system, particularly the high-level capacities of the system to deliver benefits to the members of the PCB. 2.4 Credit Enquiries Access Types Tenderers are invited to confirm that the members will be enabled to access the database of the PCB via: A secured Internet application program ; Application-to-application protocols (host-to-host) ; Batch processing facilities. Please note the following : Use of formatted input screens ; Use of standard SSL encryption and IPSec standards ; Return of PDF and/or Web credit reports Inquiry Access - Match and Merge Rules No regional Identification Number (electronic, unique, definitive, and universal) is available. However in each of the 8 member countries the governments have established a National Identification system based on card with a definitive ID number. Based on the challenges relating to the identification and subsequent merging of data in respect of individuals and commercial entities and any interrelationship, in the whole UMOA area, the vendors are therefore required to: Outline in specific detail the proposed matching logic that the system will use to access credit files on the database (e.g. Personal Identification Number, other ID numbers, combinations of this number/s with Date of Birth, Name, Address, etc.), Indicate how related commercial entities will be linked: company and related subsidiaries; or individuals histories and related companies/businesses; or guarantors and applicants, etc.

20 20 NOTE: Sophisticated system merging and matching capabilities are a paramount need, as well the experience in building algorithms for matching and inquiry purposes. The vendor must prove its previous experience in doing so in other countries and languages. Previous experience, if proven and implemented, in alternative matching and identification methodologies (e.g. biometrics) are a plus. 2.6 Inquiry Input Fields The objective of the users inquires to the PCB will be to retrieve a single, complete, final credit report, loaded with demographic, and positive + negative credit data. The use of a standardized, complete and accurate data format for data collection should allow the PCB to provide extremely reliable credit reports, and disseminate with only one command all the information present in the database compacted in one, single, document/file. The contents expected of a Credit Report, similar to what the PCB will have to supply to its users, are summarized below (not an exhaustive list): Biographic/demographic data (name surname, D.O.B, P.O.B, etc.) ; Telephones and addresses (current and previous) ; Credit information at time of application at single account level (trade-lines) both positive and negative ; Repayment performance historical record (a few years of history) ; Floor limits / loan amounts / credit limits ; Outstanding loans balances (current, 30, 60, 90, 120, 150, 180 dd, etc.) ; Maturity / installments ; Bounced / protested checks ; Risk factors associated to a consumer based on repayment record ; Graphs/charts related to consumers/firms repayment record, outstanding credit lines ; All available judicial / derogatory information (optional) ; Monthly monitoring of accounts or early warning systems ; Credit scoring, ratings, classification services ; Corporate information. Therefore candidates must be able to : Identify in detail, as part of the process, the types of consumer and commercial data that will be included in the input as mandatory data fields and what will be considered as optional to be added to an existing credit report when that data does not exist on the credit report. Supply examples of reports relating to consumers and companies (the system must be able to produce different types of reports, such as basic, standard and advanced reports); Illustrate in detail, as part of the process, how the system searches for related consumer and commercial data using localized match rules to deliver the highest possible hit-rate (see also point 2.5).

21 Creating New Consumer Records Should the system not find a consumer record that matches the input or data input, the candidates must outline in detail how the database is updated by the creation of a new consumer record. 2.8 Name and Address Name and Address normalization rules are proprietary functions of the credit reporting system. Hence: Please detail the processes to edit and normalize names and address information for subsequent database updating, processing and online maintenance and ; Confirm whether or not it will be possible to validate address information from independent 3rd party databases. 2.9 Application Security Please detail the User Validation System which will control all application system security and all application system accesses to the database for bureau members and for bureau administration purposes for regular as well as ad hoc reporting, maintenance and research purposes. Please outline in detail the process relating to the assignment of user ID s and passwords. Please confirm if the solution will deliver a security violation report when access to the database is denied to an inquirer Database Content It is envisaged that the database will contain consumer and commercial trade data with payment information on every type of credit accounts/loans. The vendors must confirm that in addition to trade line data, the system will be able to support the storage and utilization for credit reporting purposes of the following data types: Other credit data ; Court Judgments ; Returned payment instruments (bounced checks/non-sufficient funds items) ; Utilities ; Name, address and phone numbers, and other demographic data ; Various government Ids ; Employment records ; Spouse details ; Salary details ; Guarantor details ; Directors/owner of business firms. Vendors should outline in detail the process to be used in case two or more borrowers (consumers or business firms) are legally responsible for a line of credit and whether that line of credit will appear on the credit report for every legally responsible owner of information, and

22 22 if the different responsibility (e.g. main applicant, guarantor) will be identified. It is proposed that the commercial database will at a minimum contain all UEMOA statutory information available. NOTE: A final listing of all supported tradelines and other data types will have to be specified based upon the data received from the data providers during the data analysis phase of the project Data Maintenance Application Please outline in detail the system capability for bureau in-house administrators to perform online maintenance to a record including adding, deleting or modifying information as requested by the member who reported the information, or as determined by the PCB Billing System Vendors should confirm that the system would provide a daily file of daily transactions made as an input to a possible PCB internal billing system. In case no proprietary billing system can be provided, it should be at least confirmed whether a daily extract file containing a record of all inquiries made to the database can be exported to an external billing system Standard System Reports and Data Presentation Facilities Vendors should confirm if the system will provide the following standard reports/data presentation facilities for use in data analysis by PCB and/or its users. Audit report of data merging concerning a similar economic agent (case of beneficiaries of loans already existing in the PCB database but declared with different data by another bank) ; Security Violation Report ; Statistical Reports of accepted/rejected records loaded by PCB members ; Statistical reports for balancing and control of the database update process. Reports generated for PCB s users will contain only data related to that member; reports generated for the PCB utilization will contain all users data. Vendors are also requested to provide samples and examples of such reports. Also, they must provide the list and copies of other system generated reports which will be made available to PCB users Network and Communications Overview Vendors should provide specific details as to how the proposed solution will deliver industrystandard communication protocols to support internet based communications for the system Data Center security policies Vendors shall provide details and define the security protocols relating to; Physical Security ; Change Management Security ; Operating System Security related to System Administration ; Events and incidents monitoring.