All of the country’s commercial banks as well as some major state and non-state service entities have now signed on as data providers to the local Credit Bureau, a development which the Bureau says, has created an enabling environment in which larger numbers of persons can, potentially, secure hassle-free and in many instances badly needed credit.
In a brief prepared for the Stabroek Business the Bureau named the Guyana Telephone and Telegraph Company, (GTT), the Guyana Power and Light Company (GPL) and the Guyana Water Inc (GWI) as three of the major national agencies with which it now has information-sharing agreements.
Creditinfo is treating the coming on board of these entities as a major breakthrough, since it says, “the use of utility data in lending decisions has long ago been proven to be an effective mechanism for creating credit profiles and providing access to credit facilities for persons who have had little or no previous relationship (or familiarity) with the banks, and who have experienced severe difficulties with loan applications as a direct result of this.”
In its brief, the Credit Bureau says that the passage in the National Assembly of the recent Amendment to the Credit Reporting Act of 2010 has served as a significant rejuvenator for the local financial sector since all of the local commercial banks and several other lending institutions are now benefiting from the data services provided by the Bureau.
“In a few short months the Credit Bureau has proven its worth over and over,” the brief said.
Banks and other lending institutions need information on prospective borrowers to guide their decision-making for loans and other services, and typically spend a long time trying to do exactly this, the brief points out, adding that what this has meant is that prospective borrowers have had to pay a high price, wait a long time for approval, suffer from uncompetitive terms of lending and often, outright denial of funding.
In its brief, the local Credit Bureau pointed that whereas in the past the legislation called for consumers to give consent before commercial banks and other lenders could help the industry by sharing information on borrowers in their portfolio, a circumstance which it said had served as a barrier to an efficient assessment of creditworthiness.”
The lawful removal of the requirement of consumer consent prior to sharing credit data with Creditinfo has created an enabling environment in which lenders can now have access to the most current information on prospective borrowers. “Perhaps for the first time since its launch in 2013, the Credit Bureau has been able to develop close and personal relationships with stakeholders in the banking and lending sectors by creating a comprehensive repository of critical data and making it available through various credit reporting products for their use,” the CreditInfo brief said.
The new legislation, CreditInfo says, has now made it possible for banks and other lenders to create “new and innovative marketing initiatives” including collateral-free loans to selected customers, because Creditinfo has shown them how to become familiar with their borrowers.
Creditinfo, the brief says, is now better positioned “to broaden its market segments and exponentially increase the scope of information in its database by bringing in non-traditional data providers.”
Meanwhile, CreditInfo says that with the advent of its services entrepreneurs in the micro, small and medium enterprises (SME) sector are only now beginning to see the light at the end of the tunnel. Its database is expected, shortly, to benefit from the inclusion of more credit data from the hire purchase sector, credit unions, trade creditors and other providers of credit.
The intention of course, is for Creditinfo to finally create an atmosphere of such transparency in Guyana that lenders will be able to reduce crippling rates of delinquency and default, while qualified borrowers will receive benefits such as lower interest rates, faster approvals and more importantly, security and collateral terms that are less asset based but more focused on considerations of value derived from their reputation and character, as represented in their credit profile, the brief says.
CreditInfo says that it is on the cusp of expanding into additional value-added services including Bureau Certified credit clearances for use by prospective employers and landlords and online ID and address verification services for use in the business sector. It is currently working with several local companies free of charge to help optimize their database integrity, which would make them better able to service the consumer market.
The company says that it is also able to leverage its proprietary data access to create opportunities for consumers to check their own credit profile and credit score free of charge before venturing to a lender for credit. This allows prospective borrowers to fix potential problems ahead of the actual application and significantly increase their chances of approval.
“Responsible access to credit, and service quality at this level is meant to support the development of a more robust financial sector, to create countless opportunities for the expansion of business and in general, better serve the possibility of better lives for all Guyanese,” CreditInfo says.