Creditinfo Guyana: Improving relationships between borrowers and lending institutions

Feb 05, 2017 News

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 By Kiana Wilburg 

Prior to the introduction of Creditinfo Guyana, the relationship between lending institutions and

borrowers had been decidedly half-hearted, with much reservation and sometimes, issues of mistrust.

It is safe to say, however, that Creditinfo Guyana, the nation’s only credit bureau, has played a meaningful role in changing that state of affairs for the betterment of both parties and in effect, the economy.

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.

Recently, Kaieteur News conducted an interview with Chief Executive Officer of the company, Judy Semple–Joseph, who related some of the challenges and accomplishments of the entity.

The following is an excerpt from that dialogue.

 

Kaieteur News (KN): What were some of the notable achievements of the bureau last year? 

Judy Semple-Joseph (JSJ): Following a slow start in the initial two-year period, the operations of the credit bureau began to show steady progress from the first quarter of 2016.

Over the year, the number of unique credit records in the credit bureau database moved from approximately 85,000 at the end of December 2015 to in excess of 300,000 at the end of December 2016.

The amendment to the credit reporting legislation, which now makes data uploads to the credit bureau and participation of utilities mandatory, has resulted in the full participation of all utility entities in the credit bureau.

Additionally, a significant increase was recorded in the use of credit reports by lenders for the purpose assessing credit risk. Another notable achievement was the signing of several other credit information providers from the credit union, hire purchase and commercial sectors as credit bureau subscribers.

 

KN: Even with those commendable achievements, what are some of the challenges your company is still facing?   

JSJ: In light of the mandatory data upload requirement by credit providers and the resulting increase in the volume of data within the credit bureau database, some data quality issues are being experienced. This has required strenuous data-cleaning efforts over the past year and this is still ongoing.

As a consequence of these data quality issues, the credit bureau has recorded a growing number of consumer disputes, which are being dealt with under the prescribed terms of the Credit Reporting Legislation.

Data Subjects are therefore asked to utilize the facility of requesting their credit report in order to know their credit history and correct any erroneous data which may be included.

 

KN: Have you found that the bureau’s popularity among consumers has increased? 

JSJ: While consumers are generally aware that Guyana now has a credit bureau, a lot more still has to be done to provide sufficient information for a better understanding of its function and benefits.  Our public information campaign now has to be intensified.

 

KN: What has been the effect of the credit bureau on the economy? What impact have you had in that regard? 

JSJ: 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.  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. Consequently, good lending decisions will also drive growth in the economy.

More specifically, we have seen Guyana’s raking the World Bank’s Doing Business Report 2017 where the country’s ranking for access to credit improved from #168 in 2015 up to #82 in 2016.  The ranking for access to credit is the major contributor for the country’s overall ranking which moved from #140 up to #124 over the same period.

This report is a great acknowledgement of the work of the credit bureau in 2015.  We are confident that the rating in the Doing Business Report 2018 will move Guyana to the top 20 when it comes to access to credit.

 

KN: Has the bureau been able to improve access to credit by consumers ‘significantly’ and is there data to support this?

 JSJ: According to the World Bank’s Doing Business Report, there has been an improvement in the Getting Credit Index from #167 in 2013 to # 82 in 2016 – a clear demonstration of the increasing number of adults covered in the credit bureau database, and therefore having a better opportunity to access credit facilities.

 

KN: With the passage of the Credit Reporting Amendment Bill of 2015, how has that impacted the performance of the Bureau and how has it enabled the extent to which you can effectively provide benefits for the local markets?   

JSJ: The passage of the Credit Reporting Amendment Act in January of 2016 was the single most transformative event in the operations of the credit bureau over the three years of its existence.  This signal achievement has allowed the credit bureau to become fully operational, resulting in the acquisition of a critical mass of data that allows for more reliable credit reports and increased utilization of credit reports by credit information providers. Lenders are therefore now in a much better position to more adequately assess credit applications.

 

KN: How have your services impacted lending institutions?   

JSJ: From the feedback we have received, lending agencies that have subscribed to the credit bureau have found the services of the credit bureau to very useful in assisting with their lending decisions.  Their capacity to assess borrowers credit history through credit reports that are available instantly in real time, and when needed, has allowed for faster and more efficient processing of credit applications, leading to a shorter time for communicating credit decisions to borrowers.

 

KN: What are your plans for 2017?   

JSJ: Notwithstanding the successes achieved in 2016, CreditInfo recognizes the necessity of continuously striving to improve the quality of the service it offers to its more than 18 subscribers.  Uppermost on its agenda for 2017 is to further improve data sufficiency by expanding the range of data within the credit bureau database as well as increase its volume to well in excess of 500,000 unique contracts.

Additionally, in keeping with the government’s thrust towards empowerment and given the direct relationship between data subjects [individuals and businesses] and the credit bureau, CreditInfo believes it imperative that its public education programme be intensified in 2017.

To this end we will shortly launch the ‘Know Before You Go’ campaign, designed to enlighten data subjects on the basics of the credit bureau; its benefits as well as the importance of maintaining good credit habits.

Our marketing efforts will also be deepened with the offer of a series of value added credit-based products, targeted mainly at the commercial sector.

 

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Additionally, Semple-Joseph emphasised that good credit history is often rewarded. Even if your creditworthiness with entities has reached a poor state, Creditinfo Guyana can help you to improve your position in negotiating with a lending institution for your first loan.

While it does not clear your debts, Sales and Business Development Manager, David Falconer, indicated 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 $1000.

Creditinfo Inc 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.

Creditinfo Guyana, which was officially introduced on September 28, 2013 after receiving its licence to operate on July 15, 2013, established a fixed location at 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.

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