BASSETERRE, St. Kitts – TWO CARICOM member states have already signed on to a new initiative called a Credit Bureau, which will help consumers in having the opportunity to better charter their credit history and benefit significantly from their high credit scores.
Guyana and Jamaica have signed on to the Bureau based in Ireland, which grew out of the Financial Sector Assessment Programme (FSAP) of 2005/2006 and the First Economic Summit of 2007.
Both the FSAP and the Summit recommended the Credit Bureau amongst a menu of measures to improve access to capital. It was posited that deficiency in credit information is a significant contributory factor to the prevailing low level of bank intermediation.
However, that attention was drawn based on the difficulties faced by small or medium-sized enterprises with limited or no acceptable collateral and the large segment of the population that is unable to access credit due to the absence of reliable credit history.
The intention of the Credit Bureau it to compile the credit history of consenting consumers using information supplied by credit providers such as banks, trust companies, building societies, hire purchase companies, etc.
This power to access such readily available information on the credit history of the consumers not only provides benefits for them, but also to the lending institutions.
For example, let us say you are going to buy a vehicle or furniture and you need a loan to acquire the item. Instead of the banking institution contacting all of your other credit providers, you can submit your own credit report, for an affordable price, through the Bureau to the institution.
This will actually save time and provide a more speedily response while awaiting confirmation on the loan.
With the assistance of the International Finance Corporation and the private sector arm of the World Bank, legislation was drafted and enacted in 2010 to provide for the establishment of a credit reporting history to facilitate the provision of information about potential borrowers from a credible source.
The aim of the Bureau is to enable more reliable, competitive and responsible lending while protecting borrowers’ rights.
