A look at Guyana’s credit bureau
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Chief Executive Officer of Credit Info, Judy Semple Joseph
Chief Executive Officer of Credit Info, Judy Semple Joseph

AN information and decision solutions company that helps lenders and businesses make better-informed decisions in the entire credit life cycle for individuals and companies, and with financial inclusion as a vision.
These tenets form a major part of the mandate of Credit Info Guyana, a credit bureau that was established in November 2012. The company was granted a licence to operate in July 2013 under the Credit Reporting Act No. 9 of 2010 Credit Reporting Amendment Act 2016.

Its subscribers include all financial institutions, all utilities, hire-purchase companies, trade creditors and similar institutions.
The Pepperpot Magazine spoke with Chief Executive Officer of the credit bureau, Judy Joseph, who explained the purpose and vision of the company and what it means to the ordinary Guyanese.

Joseph explained that the purpose of the credit bureau is to facilitate access to finances.
“Our mission is to allow access that will give lenders confidence of identifying good borrowers who have a high propensity to repay,” Joseph told the Pepperpot Magazine.
She further explained that a good credit profile assures the lender that you have a good reputation.

Benefits
One can have easy access to the bank through a great credit score, particularly when they are embarking on building a house, taking care of children’s tuition fees and the like, Joseph was careful to explain.
During her interview, she noted that the bureau has made it easy for persons to access their credit report online.
Ultimately, according to her, a good credit report enables faster loan approval for loan agencies, particularly the banks.

Plans
Joseph is of the view that the credit bureau is about sharing information about how the credit bureau supports national development, development of the financial sector, all aimed at improving lives.
Significantly, over the years according to Joseph, the bureau is now in a position to provide analytics that lenders can use in the advancement of the various sectors.
This allows identifying the growth in various sectors.
The credit bureau ultimately hopes that lenders can see how the bureau can help them, by enhancing the profitability of their businesses.

BENEFITS OF CREDIT SCORE TO CONSUMERS
Credit Score according to information provided by the bureau, provides financial identity, enables the development of a credit history, access to all goods and services needed e.g. home ownership, education, access to credit or financial products that can improve lives, elimination of manual bias or human error in credit decisions, increased choice of borrowing and reduced cost of credit.

For businesses, credit scores provide increased access to finance; reduced cost of borrowing; better risk management i.e. better prediction of risk of delinquencies and losses; underwriting decisions, fraud reduction, more efficient competition among lenders, access to a wider pool of potential customers, availability of financial resources for entrepreneurial activity improved and profitability enhanced business opportunities.

Creditinfo, which is a global company represented in 24 markets, was granted the licence in 2013 to operate Guyana’s first credit bureau to deepen the financial sector through the establishment of a credit-reporting industry.
The establishment of a credit-reporting industry in Guyana was carefully considered to make it easier for both borrowers and lenders in dealing with the issue of inadequate access to finance and the inefficiencies which existed in the credit-granting process. According to the World Bank’s guidelines for the industry (to which Creditinfo subscribes), in markets faced with the challenges of data limitations, over-indebtedness and a large portfolio of non-performing loans, ‘credit reporting service providers (credit bureaus) can perform the crucial functions of gathering and distributing reliable credit information, improving creditor protection and strengthening credit markets.’

Hence, the expected effect of Creditinfo in the local market is a ‘reduction of insufficient information (information asymmetry) thus reducing default rates, which in turn should result in lower average interest rates, customised products and services, enhanced competition in the credit market, and ultimately increased access to credit.’
Wide-ranging credit reporting provided by credit bureaus across the globe provides benefits to populations by facilitating access to credit and financial services, especially for traditionally underserved populations.

According to the World Bank 2012 statistics, at the time of the establishment of Guyana’s credit bureau, globally half of the world’s working-age population was unbanked with 39 per cent in Latin America and the Caribbean and approximately 65 per cent in Guyana.
Providing access to free credit reports is considered one of the company’s first steps towards financial inclusion, as this allows consumers to understand their credit profile and its link to accessing credit.  Utilising the information therein contained enables citizens to make sound decisions for their own economic benefit.  For consumers, credit scoring holds the key to homeownership and consumer credit and hence the credit report as a tool can be used to improve access to credit for both individuals and SMEs who have so far been underserved or unserved by formal licensed/regulated financial institutions or other forms of lending such as retailers.

With ongoing access to and an understanding of their credit report, consumers can always be informed of where they stand financially, and so be able to make better, and sustainable financial decisions in order to ensure a stable and healthy financial future for themselves and families.
While credit data and other relevant information is more readily available for larger businesses and corporations, as well as on individuals, this is not usually the case in respect of SMEs. Therefore, enabling or improving the flow of credit-related information as well as other relevant financial information on SMEs can contribute to alleviating financial constraints SMEs often face.  This means ensuring that lenders have accurate, relevant and sufficient information on time to facilitate the assessment of SME creditworthiness.

Credit info has also developed the framework for a platform to support SME lending and is in the process of negotiating with a key partner in respect of its implementation.  This is a simple-to-use and transparent process for SMEs to provide sufficient data to enable their credit-risk assessment and for potential lenders to SMEs to access such data and conduct risk assessments.
These initiatives are expected to support increased formal access to financing for SMEs through bank lending and trade credit, thus contributing to the positive development of the economy.
It is therefore envisaged that at some point in the not-too-distant future, the local market will embrace the full range of risk-management services in the interest of further enhancing efficiencies within the credit-management process, as obtains in more mature markets.
While there will always be more work to be done, the efforts that have gone into and are continuing towards developing the credit-reporting industry in Guyana ought not to be trivialised or discounted.

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