By YOURI KEMP
Tribune Business Reporter
The Central Bank’s governor has promised Bahamian borrowers that the country’s first-ever credit bureau will “not go back in time” to look at their repayment history.
John Rolle disclosed that the credit bureau, which will be operated and managed by the Italian firm, CRIF SpA, “is up and running” and interacting with the commercial banks and other lenders to determine the process and format for supplying them with information on their borrowers.
He added that the much-anticipated credit bureau will initially provide a “snapshot” of borrower creditworthiness, and said: “So, the credit bureau is up and running. We are not getting information from the credit bureau yet because the financial institutions have to go through the first phase of submitting data to the bureau.
“That will happen within the first year of the bureau. So there will be an initial snapshot from that data submission that will provide some up-front indication in terms of the creditworthiness of a lot of the borrowers.
“Even though we won’t have the historical track record, it will provide the opening snapshot and, from that point forward, you would be able to track historically what’s going on.”
The credit bureau was official launched in January, and Mr Rolle added: “One of the near term things that we have to do is also to make certain that some of the other non-banks, such as the utility companies, are enlisted so that they can prepare to report to the credit bureau.
“The consultative process with them has begun, but there is also a regulatory step that will be necessary so that they can be declared as required to report to the credit bureau.
“The bureau may not have accurate information in terms of how faithful you were in paying on time, etc,” Mr Rolle continued, “but it will know how much debt you have, and that indicator within itself still says a lot.
“Every entity that you interact with that has some credit exposure to you - if it is your bank, they have your history, and now they will have your total view in terms of your debt exposure.
“Similarly, for your public corporations where they are also giving you credit, they will have a better picture and understanding as to whether instinctively what they always thought was the case with you is confirmed by the data,” the governor added.
“Some of what is revealed in this initial data exposure is not going to surprise a lot of our financial institutions, depending on the relationship that we have with them.
“It’s going to correlate, to some extent, how responsible we have been in terms of the amount of debts we have been taking on and how faithful we have been in living up to those debts. For some of us it will be revealing, but not for the most of us.”
The creation of a Bahamian credit bureau has been a decade in the making, with the initiative first unveiled by the Central Bank in 2010. It has long been viewed as a vital ‘missing link’ in The Bahamas’ credit architecture, with its absence depriving lenders of a centralised information repository they can draw on to better understand a borrower’s credit profile and risk of non-repayment.
CRIF SpA, which has a presence in providing such services in 30 countries across the Caribbean, Europe, North America, Africa and Asia, was eventually selected as the preferred bidder to operate the credit bureau in late 2018 and finally completed the Central Bank’s licensing process late in 2019.
The CRIF-operated credit bureau will now have to gather information from lending institutions mandated to supply it with all details on existing borrowers, particularly their credit profiles and histories, by the Credit Reporting Act.
Among those required to supply information will be the commercial banks, insurance companies, credit unions, financial and corporate services providers, Bahamas Mortgage Corporation and Bahamas Development Bank. Others likely to be added in the future are the utilities, auto dealers and furniture stores that extend credit to customers, and even the government’s revenue agencies.
The credit bureau will then compile and organise this information in a credit report provided to lenders, which will help them assess the risk provided by each loan applicant and reject those with poor histories. Its launch means that delinquent Bahamian borrowers are rapidly running out of time to get their affairs in order, and will no longer be able to bounce from bank to bank and obtain multiple loans through not disclosing their past.