Neal and Massy’s ICT company, Illuminat, has partnered with global credit bureau, CRIF, to apply for a licence to operate a credit bureau in Jamaica.

The joint venture, named CRIF NM Credit Assure Limited (CNM-CAL), was formed to provide credit bureau and related value added services to Jamaica and the Caribbean.

CRIF will provide the technology platform, industry knowledge and value added products with Illuminat providing the IT infrastructure, local industry knowledge and experience in the Jamaican and regional markets.

In a press statement, CNM-CAL said “the availability of a full credit history will give Jamaican consumers and companies easier access to credit, allowing them to obtain more favourable conditions”.

“On the other, banks and other financial institutions will be more confident in their management of the financial exposure of borrowers and will be able to avoid taking on excessive risk,” added the statement. “Moreover, the credit bureau will help prevent the risk of over indebtedness, protecting both borrowers and lenders. The resulting knock on effect on the market, will positively impact the entire local economy.”

The idea behind the credit bureau is that lending institutions can move towards relying more on borrowers’ credit history to determine and protect itself from risk and less on “a mortgage on a house, a lien on an asset, or a third-party guarantee.

“The availability of a credit history also allows individuals to qualify for and obtain credit from credit institutions more quickly and easily, and with more favorable conditions,” CNM-CAL went on to explain.

CNM-CAL joins two other entities — Creditinfor Jamaica and Premier Credit — to have shown serious interest to the Bank of Jamaica (BOJ) in operating a credit bureau.

In an effort to increase efficiency in the loan market by adopting a more definitive strategy of assessing credit risk, increasing access to finance and ultimately reducing lending rates to borrowers with a good financial track record, the Government committed to the introduction of Credit Bureaus. To this end The Credit Reporting Act received Parliamentary approval on August 31, 2010 and was brought into effect on October 1, 2010. The attendant regulations were finally approved on January 13, 2011.

The Planning Institute of Jamaica (PIOJ) in its growth inducement strategy published two weeks ago said “it is anticipated that within six months (of January) at least one fully functional Credit Bureau will be operational”.