Creditinfo driving ‘access to finance’ decisions for investment in new oil economy

Jul 17, 2022 News

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Kaieteur News – Guyana as an economy is changing. It is diversifying further and with that comes an increase in the demand for capital for investments. This however, has been a major bugbear for especially domestic entrepreneurs looking to invest or expand. Banks in the domestic banking system has traditionally held on to high levels of cash in hand, not because it did not want to lend but because of the risks involved. A solid creditworthiness changes that.

But in a country that still deals primarily in cash and is now moving towards more paperless transactions, credit report becomes even more import.

Now celebrating its ninth anniversary since launching domestically in 2013, Creditinfo, Guyana’s only credit bureau, based in the capital city of Georgetown, has over the years evolved with the country and has contributed to a paradigm shift in the local economy where its credit reports have become a major factor driving financial and lending decisions for persons in Guyana’s burgeoning oil driven economy.

Creditinfo Guyana provides intelligent information, software and analytic solutions to facilitate access to finance.

While consumers in first-world markets are familiar with the workings of credit reports and its importance, Guyanese consumers are now waking up to the idea, even as local institutions have long been using the bureau’s credit reports to inform their judgment on a range of financial and lending decisions, according to the entity.

Given that the facility is Central Bank-approved as a ‘Licensed Credit Bureau’, this allows companies to partner with Creditinfo, as specified by the Credit Reporting Amendment Act, ahead of lenders being able to access credit reports as well as share data.

To date, more than 300,000 credit reports have been issued since the bureau’s establishment in Guyana, “as this is its most utilised service from our database of some 40 subscribers who use our service across a range of institutions. These include bank and non-bank financial institutions, micro-financial institutions, hire purchase, student loan, credit unions, trade creditors, utility companies and other lenders.”

It was noted too that over the years, credit report usage has generally been increasing as lenders recognise the extent to which their credit risk is reduced when the use of a report is factored in.

Creditinfo neither makes nor influences credit decisions, “the decision of whether or not to grant credit is dependent on the lending intuition’s credit policy and the assessment done based on the individual’s credit history.”

In the assessment of a borrower’s credit report is a prerequisite for the granting of any credit facility, as is required under the Credit Reporting Amendment Act, which lenders are required to implement.

As such, in order for an individual’s credit report to be accessed, the law requires that written permission must be given.

“This, in a nutshell, means that in order for a company or individual to be granted a loan or an item on hire-purchase, businesses or lenders typically request your credit report from the Bureau to determine your eligibility of attaining same. However, this is not before acquiring written approval from you, the consumer, to access the credit report.”

To this end, “lenders utilise the credit report in their lending decision to determine how the borrower has serviced previous loans; whether the borrower has had any missed payments or arrears, how many outstanding credit facilities, among other things, which help to determine an individual’s credit profile. In excess of 450,000 new credit facilities [including utility data] have been recorded in our database at the end of Q1 2022.”

This is according to Chief Executive Officer, Mrs. Judy Semple-Joseph, who in retracing Creditinfo’s achievements thus far, noted that the business “now account for a significant amount of credit decisions by institutions in Guyana.”

She has since also advised persons to ensure that their bills are paid on time, including utilities such as water and telephone bills and to ensure that any arrears on the account are promptly cleared, since bad payment patterns can reflect negatively on their credit report.

“Over the past three years, we have seen an average of 500 percent growth in consumers’ requests for credit reports.  However, there is the need for more persons to access their credit reports as we continue to receive many queries after persons approach a financial institution for credit and then realise that erroneous information on their credit reports needs to be corrected,” Semple-Joseph added.

The CEO also used the occasion to disclose that many persons have in fact lost the opportunity to access financing, simply because they were familiar with the information on their credit report which could have been corrected prior to them approaching the lender.

“This is why, self-request credit reports by consumers are encouraged, particularly prior to approaching financial institution or company.”

In the coming years, Semple-Joseph notes that she sees the company expanding towards further supporting Guyana’s economic advancement, by providing intelligent information, software and analytic solutions that empower clients to mitigate financial risk.

 

 

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