Advantages of a Bahamian Credit Bureau

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To ensure that safe and sound lending occurs, the credit bureau will be used successfully as a part of the loan approval process which is commonly recognized as the ‘commercial or consumer lending process.’ In the commercial lending process, lenders, issuers or loan officers will be able to rely on more credit reporting as opposed to conducting an investigative process on an individual who is mostly likely assessed by inaccurate information. Since the Credit Bureau of Belize has been established, Governor Glenford Ysaguirre had highlighted that the bureau has assisted the credit market effectively in networking with many financial institutions and sharing information in a formal standardized formats, thereby reducing the possibilities of credit being granted based on partial and inaccurate information on a borrower’s history . The Bahamas definitely needs to consider establishing a credit bureau because it will help to reduce the likelihood of applicants who do not possess the capacity to repay banks. Based on article from Nassau Guardian, Governor Craigg added that the result of reviewing credit profiles of unlikely borrowers would encourage them to put in place measures to improve their assessment and hence increase the chance that they will be successful in obtaining a loan. Most importantly, credit unions, banks, and other lending institutions will not only be able to determine whether an individual can be granted a credit but also decide at what interest rate.

Finally, one of the main contributors of a credit bureau is the use of web-based technology. Utilizing the latest in technology will result in having a fast, safe, reliable, integrated system that can be tailored to meet banks’ requirements. In response to providing appropriate and adequate safeguards to the thousands of credit histories from consumers and entities, the Commissioner of Data Protection, Sharmie Farringtion, had seek to bring about a coordinated approach to data protection which encompasses the involvement of the Central Bank, ICF, and other regulatory financial services institutions in The Bahamas . She added that it is of crucial importance that emphasis is placed on data protection on financial information as the banking and financial services industry is one of the main industries. Technology, in a credit market, will significantly impact the way banks conduct business and its influence will continue to grow significantly. Other well known international credit agencies such as Experian and TransUnion provide standard industry technology to provide an intuitive interface with their application . As the credit market expands from New Providence to various family island, the availability of credit information can be accessed everywhere from a database and application server on real-time. Across different servers in different geographic locations, credit services providers will not experience redundancy but will have daily offsite backups to the data is secure and safe .

To conclude, a Bahamian Credit Bureau will play an essential role in the financial infrastructure of emerging markets, and will be of particular importance to the development of the Bahamian Banking environment. The Central Bank’s intention to establish a bureau with legislation will ensure confidentiality of consumer’s personal and financial information. It will also promote competition within the credit markets, creating downward pressure on interest rates for banks. Lending intuitions, however, will have a better chance to fully evaluate the creditworthiness of consumers and entities. These forthcomings will impose a positive economic growth, improving the credit market in The Bahamas.