Nearly two years after legislation was passed in Parliament the way has been cleared for the establishment of the first credit bureau in Jamaica.
On Wednesday March 7 Finance Minister, Dr. Peter Phillips, approved the first licence under the Credit Reporting Act.
It has been issued to Creditinfo Jamaica Limited (CJL).
CJL is majority owned by Creditinfo Group, a company incorporated in Iceland, which offers credit information and related services in several central and eastern European jurisdictions.
The Finance Minister has given the company 12 months to commence operations.
During this period it is anticipated that the new entity will complete the set-up of operations including the establishment of reporting relationships with eligible credit information providers.
These include Commercial banks, Merchant banks, Building societies, Credit unions, insurance companies, the Students Loan Bureau and hire purchase companies among other lending entities prescribed under the Credit Reporting Act.
CJL’s application for a licence is one of four that have been received by the Finance Ministry.
The new credit reporting framework will allow a licensed Credit Bureau to collect information on a borrower’s credit history from lenders and other relevant credit information sources, and provide that information, for a fee, to prospective lenders.
Information can be accessed only from a credit bureau with the consent of the borrower.
Data acquired from a Credit Bureau can assist lenders to better assess the creditworthiness of borrowers and offer more competitively priced credit facilities with more efficient processing times.
This should provide improved access to financing for persons with good credit histories and facilitate improved productivity.
In the longer run Credit Bureaus should result in fewer non-performing loans and further strengthening of individual entities and the overall financial system.
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