– passage of new laws expected this year
Commercial banks and other local lending agencies are eagerly anticipating the passage in the National Assembly later this year of a Credit Reporting Bill that will create a quick reference rating for potential borrowers.
The Credit Reporting Bill, which was tabled in Parliament in 2009 and which is expected to be debated and passed into law in the House during the course of this year will legitimize the creation of private entities authorized to secure credit information on individuals and make this available to potential creditors.
Local entities providing financing and other forms of credit are already expressing enthusiasm about the anticipated passage of the new legislation. “It would be absolutely beneficial not only to Courts but to all the businesses in Guyana,” Courts Credit Executive Kenneth Schrubb told Stabroek Business recently.
Credit bureaus function as storehouses of credit histories of persons gathered from various legitimate sources including lending agencies and the courts. In turn the bureaus serve as a source through which potential creditors can secure information on the credit histories of potential clients. “Once business houses are happy to share information [with the bureau] it would operate to the benefit of all. At the end of the day what the credit bureau would do is give suppliers a sense of confidence that any customer you are doing business with did not have delinquency in the past,” Schrubb added.
Schrubb told Stabroek Business that credit bureaus are available in most of the other territories throughout the Caribbean. Here in Guyana the furniture and appliances establishment has had to rely entirely on its own internal assessment of the creditworthiness of potential customers. Schrubb said that even with passage of credit reporting legislation the company may still need on occasion to revert to its system of customer analysis since there may be cases of potential customers for whom no credit history is available. “We would not turn away a customer who has no listing with the Credit Bureau,” Schrubb said, adding, that invariably, the absence of a listing may not necessarily suggest a bad record but simply that individual either has a clean repayment history, or is seeking credit for the first time.
The Credit Reporting Bill is described as “an act to establish a credit reporting industry with the aim of enabling more reliable, competitive, and responsible credit lending while protecting borrowers’ rights.” The bill contains a number of legal safeguards designed to ensure that no information gleaned by a credit bureau on customers’ past financial transactions is carelessly or maliciously passed on to another agency or person except for the purpose of securing a credit decision.
Under the law “the Bank [of Guyana] shall have the overall authority to issue a licence to any applicant for a licence to operate a credit bureau in Guyana and supervise activities of a credit bureau,” and such licences will be granted only after the bank is satisfied that the conditions for operating a credit bureau have been met by the applicant. The law will also place the onus on the credit bureau to ensure the fairness and accuracy of the information provided as well as to ensure that the information provided does not include the personal information of any consumer, unless the consumer consents in writing to the inclusion of such information.