Credit bureau up and running – information sharing with banks being refined

( A year after its formal launch Chief Executive Officer of Creditinfo (Guyana) Inc Judy Semple-Joseph said the local bureau has “sealed” arrangements with all of the country’s commercial banks under which they will share information.

“All of the commercial banks have now signed on to work with the credit bureau. They have signed a document indicating that they subscribe fully to the credit bureau and we are now engaging in the process,” Semple-Joseph told Stabroek Business in an exclusive interview earlier this week.

Under the law governing the operation of the credit bureau in Guyana, commercial banks must still secure clearance from their individual customers before they can furnish the bureau with their data. “It is now for the banks to clean up the data and to ensure that they get that permission from their individual customers,” Semple-Joseph said. She added that while commercial banks in other countries consenting to work with a credit bureau were automatically empowered to share the data of all of their customers, local legislation dictated that banks secure individual clearance from their customers before sharing their data.

CEO of Creditinfo (Guyana) Inc Judy Semple-Joseph

Last Tuesday marked the first anniversary of the formal launch of a credit bureau regime in Guyana, a move which sections of the local business community have been advocating for some time.

Earlier this week the Bank of Guyana issued a statement in which it described the advent of the credit bureau as “an important milestone in the development of the financial sector.” The statement alluded to what it said was the “critical role” which a credit bureau plays in the expansion of credit in an economy. It said the institution would have the effect of improving the “performance and quality of loan portfolios by allowing greater access to financing while facilitating financial inclusion of the ‘unbanked’ in the formal sector through the use of credit reports.”

Semple-Joseph herself alluded to the enhanced role which “reputational collateral” will now play in the country’s formal credit system.

Creditinfo Guyana Inc has spent much of the past year engaging financial institutions in an effort to secure their agreement to collaborate with the bureau and Semple-Joseph alluded to what she described as the “layman’s expectation” that might have resulted in a measure of impatience regarding the pace of progress in securing collaboration with the financial institutions.

“We felt then that the process would have been much more advanced and that by now we would have been issuing credit reports. However, when we looked at how credit bureaux evolved and how they were established we realised that it takes time, so that I would say that as far as a time frame for the full and effective implementation of our operations is concerned, we are definitely on track.”

Semple-Joseph said, meanwhile, that even as the bureau continued to work to further refine its collaborative arrangements with the commercial banks and its other “credit information providers, including providing them with training in the procedures associated with collaborating with the bureau and installing the software and other technological equipment that are necessary for data to be properly hosted and transferred, it had reached a point where it was planning a more aggressive public information initiative aimed at further heightening awareness of the role of the credit bureau in creating an enhanced local credit culture. “We understand that a point has been reached where we need to create structured initiatives to communicate information to the various publics,” Semple-Joseph added.

The formal signing of agreements between local commercial banks and the credit bureau means in effect that a “reciprocal arrangement” now exists for the sharing of data even though she said it was important to re-emphasise that data release had to be authorised by individual customers.

In its statement the Bank of Guyana said “the sustainability of the credit bureau depends highly on the richness of the database which could only be attained by the provision of credit information data to the credit bureau by the credit information providers.” Having regard to the stipulation in the local legislation regarding the requirement of individual customer consent prior to the sharing of data, Semple-Joseph told Stabroek Business that part of the pursuit of local commercial banks in recent months has been “to identify those for which consent has been given so that they can share those with the bureau. At the same time there is need to have a process to acquire the clearance in those cases where the sharing of information has not yet been consented to.” She said that in this regard the rate of progress had varied from bank to bank.

The credit bureau, meanwhile, has been offering what its CEO says are additional “value-added products” including an investigative business report which allows the bureau to provide information on new businesses being established in Guyana. Additionally, the bureau provides international business reports which allow it to investigate any company in any part of the world. The bureau also provides an identity verification service.

Semple-Joseph said she believed that once the credit bureau became fully operational “in all of its various facets the consuming public is likely to quickly become aware of its considerable benefits.” She said that from the perspective of the consumer more people will have access to financing, not just for business but for consumption as well.

“This is where there reputational collateral will kick in. You can benefit from your good reputation,” she said. The credit bureau regime is likely to be particularly useful for small business owners and aspirants since, with their data already in the system it would no longer be necessary for them to become caught up in the process of producing all of the various documents that a lending bank might require. “Essentially, the services of the credit bureau better positions you to benefit from the loans and other services provided by the banks.