Fri | Dec 2, 2016

Credit bureau has 75 per cent hit rate

Published:Monday | January 19, 2015 | 12:00 AMChristopher Serju

The adoption of a credit bureau system has done much to boost the country's business environment profile and Jamaican consumers also stand to benefit significantly from this newly formalised trade practice here, according to Megan Deane, chief executive officer of Creditinfo Jamaica, the first locally licensed credit bureau on the island.

"Credit information is considered to be a critical financial component of financial infrastructure for every country. So, the fact that we actually passed the legislation and established licensed bureaus and we started operating and sharing information was one of the critical factors that caused Jamaica to go further up on the World Bank's Doing Business index," she told The Gleaner during an Editors' Forum at the company's North Street offices last week.

Since July 2013, Creditinfo Jamaica has been collecting and collating information on the credit-management behaviour of individual Jamaicans and companies that is used in determining credit-risk rating.

"What basically happens is that we, as the credit bureau, assist our credit information providers (CIPs) to bridge the gap of what is called asymmetric risk, where the person applying for a credit facility, has a better idea of the probability of their repaying that facility than does the institution extending that credit.

"We are able to provide the CIPs with a full picture of how a credit applicant has been handling their credit obligations to CIPs already reporting to the bureau," said Deane.

Creditinfo Jamaica has, to date, signed up some 60 information providers, some 20 of which are already supplying credit information on their customers.

Meanwhile, Deane said that by next year, Creditinfo Jamaica would be in a position to make statements about the credit behaviour of various categories of Jamaicans. She said rigorous analysis of data that have been collected is now taking place.

"Right now, we're experiencing a 75 per cent hit rate when an institution searches our database, so there is a very high probability that whoever is being searched for has some credit history in our database," she said.