Minister Phillips Signs First Credit Bureau Licence

Minister of Finance and the Public Service, Hon. Dr. Peter Phillips, on March 7 issued a licence for CreditInfo Limited to operate the first credit bureau in the country.

“I signed the first licence under the Credit Reporting Act…and we hope overtime, that this will help to improve the quality of the loan portfolio of the banks,” Dr. Phillips said at the official opening of the GraceKennedy Financial Centre located downtown Kingston, later that day.

CJL is majority owned by Creditinfo Group, a company incorporated in Iceland, which offers credit information and related value-added services in several central and eastern European jurisdictions.

The Minister has specified a period of 12 months for CJL to commence operations. During this period it is anticipated that the credit bureau will establish reporting relationships with eligible credit information providers and complete the set-up of operations.  CJL’s application for licence is one of four that has been received by the Minister.

The passage of the Credit Reporting Act and related Regulations between 2010 and 2011, provides the legal framework for the establishment of credit bureaus in Jamaica, and the sharing of credit information between specified bodies.

This will enable lenders to better assess the credit worthiness of customers and to offer more competitively priced credit facilities with more efficient processing times.

A credit bureau system will allow banks to better understand their customers in order to price their loans to reflect the risk of the individual. This should have the effect of differential interest rates reflecting the credit ratings of a loan applicant.

Consumers will also know how they are rated and will be able to monitor the information held about them, and take the appropriate steps to improve their ratings where necessary.

Eligible credit information providers include commercial banks, merchant banks, building societies, credit unions, insurance companies, the Students’ Loan Bureau, hire purchase companies, among other lending entities prescribed under the Credit Reporting Act.

 The Bank of Jamaica (BoJ), the designated “Supervising Authority” under

the Credit Reporting Act, is charged with reviewing applications and making recommendation to the Minister of Finance.

In reviewing applications, the BoJ gives consideration to criteria prescribed under the Act, such as minimum capital requirements, fitness and propriety of proposed principals, and the adequacy of systems and arrangements to undertake credit reporting services.

Further information on the Credit Reporting Act and the Credit Reporting Regulations are available on the BoJ website.

By Chris Patterson, JIS Reporter