By Kiana Wilburg
The introduction of a credit bureau into Guyana’s financial landscape has proven to be a worthwhile move by the authorities of the day. In fact, the presence of CreditInfo Guyana has led to a significant improvement in the access citizens
have to credit. This was highlighted in a report produced by the World Bank.
With this in mind, the bureau’s CEO, Judy Semple-Joseph briefly expounded on the importance of the bureau.
She said that the establishment of a credit bureau in Guyana is part of government’s thrust towards deepening the financial sector and fostering greater access to credit for both individuals and businesses.
Semple-Joseph explained that increases in the volume of loans disbursed to these groups, greater information-sharing, contributing to sound lending decisions and over time, leading to more beneficial interest rates to those who are financially responsible, are some of the expected benefits of the credit bureau.
The CEO posited that good lending decisions will also drive growth in the economy.
With regard to the World Bank’s Doing Business report for 2017, which documented Guyana’s improvement in accessing credit, she said that the country’s performance in this regard is the major contributor for its overall ranking in the ease of doing business which moved from #140 up to #124.
Semple-Joseph said that the 2017 report, which is based on countries’ performance for the 2015/2016 period, is also a great acknowledgement of the work of the credit bureau.
According to the report, Guyana and Tanzania made the largest improvements by expanding borrower coverage. With regard to CreditInfo Guyana, which became operational in May 2015, the report said that it expanded its borrower coverage from 2.4% to 16.4% of the adult population through obtaining data from one microfinance institution, one trade creditor and one water utility company as well as from six private commercial banks.
The report also highlighted that Guyana expanded the number of borrowers listed by its credit bureau with information on their borrowing history from the past five years to more than 5% of the adult population.
Additionally, in the area of increased transparency of information, the report lists nations such as Guyana, Kenya, Qatar, Senegal, Singapore, United Arab Emirates, Uzbekistan and Zimbabwe.
Doing Business 2017: Equal Opportunity for All, a World Bank Group flagship publication, is the 14th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies—from Afghanistan to Zimbabwe.
Data in Doing Business 2017 are current as of June 1, 2016. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why.
A credit bureau is an organization that collects credit information from lenders and other entities on a consumer, studies it, and uses it to create comprehensive credit reports and other value added services.
The credit report contains biographic information and details of the consumer’s financial obligations and payment history. It may also include a credit score. This is a number used to show the credit worthiness of the consumer to the lender. The figure will allow the company to determine the rate at which the person’s arrears will be repaid.
This report is then provided to banks and other institutions in an organized format for specified reasons, only after the permission of the consumer has been obtained.
Additionally, Semple-Joseph, says that many good Guyanese borrowers may be unable to access credit due to the absence of that history being properly recorded. Evidence of good credit history is often rewarded, she asserts.
Even if your creditworthiness with entities has reached a poor state, the Credit agency can help you in changing the state of this situation so that you can be in a better position to negotiate with a lending institution for your first loan.
While it does not clear your debts, Sales and Business Development Manager, David Falconer, indicates that the entity informs borrowers on how to make better choices and about various ways in which they can be able to manage their capacity to borrow and pay monies outstanding.
The consumer will then be transformed from being a poor borrower to a reliable one and a record of the now improved history can be had from the company annually for free, but at any time at an affordable cost of G$1000.
Unfortunately, there are incidents where persons have approached companies under the pretence of another name in order to access credit and or donations. Considering the bureau’s list of partner companies, it is highly likely that this can be prevented, provided too, that the customer is connected to the credit company.
Semple-Joseph said that one of the features of the bureau is that it prevents situations such as those. Falconer added that it is important that companies and citizens to get on board the modern way to protect their identities.
Guyana is the 60th country to host CreditInfo Inc which has its headquarters in Iceland. It has been one of the fastest growing organizations in credit risk management since 1997 and is known to be one of the top suppliers in the industry.
The local company which was officially introduced into the local market on September 28, 2013 after receiving its licence to operate on July 15, 2013, established a fixed location at Lot 267B New Market Street, Georgetown. Its presence was sought in Guyana after it was realized that there was a deficiency in credit history information in the local market.
Over the past year the Credit Bureau has established collaborative relationships with all the banks, most of the major utility companies in Guyana and is currently engaging the insurance and retail sectors.
The list includes Guyana Bank of Trade and Industry, (GBTI) Republic Bank Limited, Bank of Baroda, Scotiabank, Demerara Bank Limited, Citizen’s Bank as well as Hand in Hand Trust and Institute of Private Enterprise Development, (IPED) and major utility companies, the Guyana Telephone and Telegraph Co. and Guyana Water Incorporated.
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