By Orville Williams
Countries served by the Eastern Caribbean Currency Union (ECCU), including Antigua and Barbuda, are set to soon benefit from a newly-established credit reporting system that will potentially bolster the region’s financial ecosystem.
The launch of the ECCU Credit Bureau will be a historic move, both for the union itself and the rest of the Eastern Caribbean, and once it is established, it promises to significantly improve the relationship between borrowing customers and credit-offering institutions.
Within its remit, the Credit Bureau will support lenders to more efficiently assess risks by accessing the credit history of potential borrowers. It will also cut down the time and other resources required for due diligence checks and the like.
Similarly, the Credit Bureau will allow said borrowers to utilise their credit history as leverage for accessing loans, which could mean speedier processing times and also more favourable lending rates.
During a media session about the forthcoming system yesterday, Governor of the Eastern Caribbean Central Bank (ECCB) Timothy Antoine noted that there are too many situations where deserving customers are interested in accessing loans and even apply, but are unsuccessful due to the lack of a properly recorded credit history.
He lamented those gaps in the financial system within the region, and talked up the Credit Bureau as an important phase in bridging the gaps and developing said system – this he credited to the fact that the financial system in nearly every territory where a proper credit reporting system has been established, has only improved.
Under the system, banks and other licensed financial institutions, insurance companies, utilities providers and similar entities will provide the Credit Bureau with information on customers’ credit history, based on provisions made in the draft credit reporting legislation.
A person’s credit history – via a credit report – will then be accessible to entities including: institutions where persons are applying for credit, insurers where persons are applying for insurance, landlords of whom persons are applying for leases, and certain employers who are recruiting for positions that include significant financial responsibility.
These entities are said to have ‘permissible purpose’ under the draft credit reporting legislation.
On the flipside, customers will be able to access their credit reports once per year for free, in the event a loan application is denied based on information included in their credit report, or in other circumstances at a cost.
And the Credit Bureau will not only collate and manage credit reports, but it will also provide other services including risk analysis, monitoring and dispute management.
Also addressing the media session yesterday were Christopher Louard, Director of the ECCB’s Financial Sector Supervision Department – who emphasised the credibility and safety involved in the credit reporting system – and Van Reynders, CEO of CreditInfo ECCU Ltd, the region’s only approved Credit Bureau to date.
Reynders explained the various processes involved in credit reporting, including the impact on consumers and the credit marketplace. He spoke too on the observations made in Jamaica, Barbados and Guyana, where credit reporting systems have been implemented.
According to the ECCB, the ECCU Credit Bureau will begin to operate once the draft credit reporting legislation is enacted in all the ECCU territories.
Antigua and Barbuda passed its own Credit Reporting Act back in 2017, and it was revealed during yesterday’s session that there are two countries pending in this regard.
The Credit Bureau will serve the eight territories of the ECCU and is expected to have offices in each territory, which will provide services like furnishing borrowers with copies of their credit reports and dealing with any queries from borrowers and lenders alike.
The draft credit reporting legislation also makes provisions for the ECCB to be the regulator of the ECCU Credit Bureau.