By David E. Falconer
Manager, Sales and Business Development, Creditinfo Guyana
Almost a century ago, an American named John Pierpoint Morgan, or J P Morgan who is more widely known as the most powerful financier in the world, when asked by a House committee if commercial credit was based primarily on money or property, responded instead to everyone’s surprise that in fact it was based on character.
His words are so portentous and important that I believe it is useful to replicate them for your benefit: “The first thing is character… before money or property or anything else. Money cannot buy it… because a man I do not trust could not get money from me on all the bonds in Christendom.”
This central issue of character and trust is as important today as it was so many years ago to old JP Morgan. Banks and other lenders look to an applicant’s past records and behaviour to derive some indication of how he is likely to behave in the future. Credit markets today function on a foundation of trust;