Watch your credit!

-first local rating agency gets licence to operate

Creditinfo Guyana was yesterday licensed as the country’s first ever credit bureau and Bank of Guyana (BoG) Governor Lawrence Williams said it will usher in an era where the lack of collateral will no longer be a barrier to citizens and businesses trying to access credit financing.

The company is a subsidiary of Creditinfo International, part of the Creditinfo Group of Iceland, which was selected by the BoG to provide the

Bank of Guyana Governor Lawrence Williams (left) presents Creditinfo International Senior Manager Kristinn Örn Agnarsson with the licence while Finance Minister Dr Ashni Singh looks on
Bank of Guyana Governor Lawrence Williams (left) presents Creditinfo International Senior Manager Kristinn Örn Agnarsson with the licence while Finance Minister Dr Ashni Singh looks on

credit bureau service after evaluation of proposals submitted by four of the six providers invited to submit proposals.

Speaking at the issuance of the licence yesterday, Williams noted the perception that deficiencies in credit information in Guyana contribute significantly to the prevailing low level of bank intermediation. In the early stages leading up to the company’s licensing, he said limited or no acceptable collateral and the fact that a large segment of the population is unable to access credit due to the absence of reliable credit history were flagged as major issues.

The process of mitigating these problems, he added, will begin with the creation of a database that will house the credit information on consumers across Guyana. This database will contain and make available information ranging from a person’s behaviour in paying everything from their utility bills to their track records in making payments to commercial creditors, such as banks, credit unions, and even stores.

Explaining how Creditinfo International was selected by BoG, Williams noted that two of the six service providers invited to submit proposals did not. Of the four proposals received, two were shortlisted by the bank, after a careful look at their “technical proposal, including the IT solution and the security of data, the experience of the service provider, their financial strengths and operational flexibility.”

After determining that the company had met all the requirements, he added, the BoG consulted the minister, advising on the issuance of the licence, which was signed by the Minister on July 15th.

Judy Semple-Joseph, Chief Executive Officer of Creditinfo Guyana, said that five companies have already signed on to the company’s operations, and it is negotiating with four others who are close to signing. Semple-Joseph added that Creditinfo hopes to have at least 12 agencies on-board by September.

Currently, she told reporters, Creditinfo has started discussions with several different kinds of credit service providers, but she indicated that it is focusing primarily on signing the banks for now. Other credit providers, such as credit unions, will be pursued in later phases.

Semple-Joseph said that for the past four to six months, the company has been sharing with the various credit service providers a “subscriber agreement that outlines the terms and conditions of their involvement with the credit bureau.” This, she explained, is necessary since the process required is not always a straightforward one.

Consumers will have to give consent to the various agencies in which their information is likely stored before that information is provided to the bureau, and the bureau will need to seek the permission of the consumers before making that information available to creditors seeking that information. Semple-Joseph was optimistic that there would be no difficulties in obtaining these permissions

Judy Semple-Joseph, CEO Creditinfo Guyana
Judy Semple-Joseph, CEO Creditinfo Guyana

In fact, she said, the provision of a consumer’s report by Creditinfo to a requesting credit supplier may result in easier access to such financing. “If you don’t give consent then your information will not be there then you will not be able to benefit from the service that the credit bureau provides,” Semple-Joseph pointed out.

Kristinn Örn Agnarsson, Senior Manager with Creditinfo International, said that for the first time in Guyana good historical records will be rewarded. Finance Minister Dr Ashni Singh echoed this sentiment, mentioning that thousands of Guyanese have over the years established perfect financial track records as responsible borrowers, but have been unable to benefit from such diligence.

Singh added that there has long been a cry by consumers for greater access to financing, and a cry by credit providers who are “awash with liquidity” for more lending opportunities. The emergence of Creditinfo Guyana, Singh suggested, will serve to link these needs. For persons who have maintained good habits in honouring their credit agreements, he said, they may not need collateral or even a guarantor to obtain credit financing.

Semple-Joseph said that a generic model will be used to describe a person’s credit score. “For now, there is a generic model that will be used. I think the range is from 200 to 900, with 200 being the lowest and 900 being the maximum,” she said.

Creditinfo plans to “go live” on September 27th, which Semple-Joseph says entails the uploading of data which it is currently gathering. Services to the public, however, will not commence until December 1st.  Once the company begins operating, credit providers desirous of obtaining the credit report of a consumer will be charged a fee for the information, while consumers desirous of seeing their own profile can do so at a cost of $1,000 per report. However, each consumer will be entitled to one free credit report per annum.

In cases where a consumer wishes to challenge a report produced on his/her credit history, a request can be made of Creditinfo Guyana, which will generate another report at no cost to the consumer.

In an effort to sensitise the Guyanese public about the advent of the company in Guyana, Creditinfo is designing public education programmes, which, according to Semple-Joseph, will be rolled off in the coming months.

The Credit Bureau Project emerged from the Financial Sector Assessment Programme (FSAP) of 2005/2006 and the First Economic Summit of 2007. Both the FSAP and the Summit, Williams said, recommended the bureau in addition to other measures aimed at improving access to capital.

With the assistance of the IFC,  the private sector arm of the World Bank, legislation was drafted and enacted in 2010 to provide for the establishment of a credit reporting industry to facilitate the provision of information about potential borrowers from a credible source. The aim of this legislation was to enable more reliable, competitive and responsible lending while protecting the borrower’s rights.

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