Credit bureau imports NCB data, nearly doubles database
Utility companies, trade creditors may soon start providing credit information
BY JULIAN RICHARDSON Assistant Business Co-ordinator email@example.com
Creditinfo Jamaica last week imported credit information on customers from National Commercial Bank (NCB), nearly doubling the database of the country's first licenced credit bureau.
The company now has just under 600,000 records of loan contracts — of which 295,000 are unique individuals — across 11 institutions, including NCB, Scotiabank, Sagicor Bank, Access Financial Services, Kris An Charles Investments and Singer Jamaica.
Credit reports are provided by Creditinfo in response to a request either by an individual or a credit-providing agency with which they are doing business and have provided consent to access their credit history.
Megan Deane, the CEO of Creditinfo Jamaica, noted that institutions have actually been pulling and analyzing data from the credit bureau since it became operational in July last year. Microfinanciers in particular have been pulling data from the credit bureau regularly, she said.
And the fact that it now has information from the two largest financial institutions — Scotia and NCB — increases the probability of an individual's data being available for the delivery of an up-to-date credit report, thereby enhancing a lender's risk management capability, she told the Business Observer.
Deane and Camar Williams, the company's sales and marketing manager, spoke to the newspaper on Monday at Creditinfo Jamaica's New Kingston office.
"Quite a number of institutions have picked up momentum in how they utilise these reports because they do recognize a great deal of value once they start pulling it," Williams said. "It has become evident to them that not all the information is being relayed to them in an interview session with the respective applicants."
Some 40 institutions are actually signed on as credit information providers (CIPs) — to provide credit and public information — to Creditinfo Jamaica. But Deane admitted that there have been some teething problems in actually getting the data from all the CIPs. Incomplete records, with some needing a Tax Registration Number (TRN), the unique identifier used by Creditinfo, have been among the confluence of challenges.
"So those entities that didn't have this information had to be updating their records," Deane said.
"There were also situations where the technology to gather the data and transport it was not up to scratch — you had to have people bringing in their software developers and making them write the progranmme that could allow them to pull data," she said, noting that the problem was more common among micro financiers.
Deane said the company has been working hard with the signed CIPs that have not yet provided data and aims to have the credit information from them by the end of the year.
"This should bring us to at least 800,000 records," she said.
Creditinfo, which already accesses data from a wide cross section of companies — including commercial banks, credit unions, building societies, microfinanciers, development institutions and hire purchase companies — is looking to expand its range of CIPs. The company has been lobbying the Bank of Jamaica to expand the list of approved CIPs to include utility companies and trade creditors. Deane expects a positive decision from the central bank by the middle of the year.
"We have been advised by the BOJ that they will shortly be making recommendations, and I am assuming a positive one, about adding the utility companies and the trade creditors," Deane said.
The addition of utility companies is being pursued against the need for information on persons who have never taken out a loan. The rationale is that where persons do not have loan obligation, they would have a credit history based on their utilisation of services such as cellular phones, television cable subscription, electricity or water.
Deane said the company is also ready to focus on adding insurance companies, having already dealt with most of the other types of financial institutons.
Creditinfo is a joint venture between local partners Coalesce Credit Solutions Ltd and Iceland-based Creditinfo Group Hf — a leading international service provider for credit information and risk management solutions that operates in 14 countries worldwide.
It was granted a licence by the Ministry of Finance to operate a full service credit bureau in March 2012. A second credit bureau operation, CRIF NM Credit Assure Limited, was given the nod a month later. The introduction of the industry to Jamaica is expected to help revolutionise the local finance sector by allowing lenders to better assess the creditworthiness of customers and offer more competitively priced credit facilities with more efficient processing times.
Lending is an important facilitator of economic activity and access to finance is a critical indicator of business friendliness measured by the World Bank in its Doing Business report. Jamaica is notorious for its lack of access to affordable financing, particularly for the importany small and medium-sized enterprises sector.
Deane is optimistic that significant changes to the lending environment, as a result of the addition of the credit bureau system, will be noticeable within the next two years.
"Not only is it best practice to use credit reports, it is better for your risk management and you are able to more fine tune how you treat individual credit applicants," Deane said.
"I certainly think that it will take a little time to translate to any changes in terms of how banks structure their risk management and (apply) rates. Obviously they would want to have a period of testing to see whether or not the rates they report and the scores are good predictors of behaviour."
Creditinfo's revenue stream includes subscription and information pulling fees. It also offers packaged solutions, including consultancy on risk management.
The company will be adding a module shortly to alert clients on critical credit information. It is also working with a number of public bodies, including the Office of Trustee Bankruptcy and the Electoral Office Jamaica, for its identification verification tool.
"We provide those strengths to the institutions to ensure that once an individual comes to them for a loan, they can get a full view from them, by not only looking at the credit data, but also the public information," Williams said.