Central Bank of Belize Spearheads Caribbean Credit Reporting Conference
“Achieving the Possibilities Through Credit Information Sharing” is the theme for a Caribbean Credit Reporting Conference spearheaded by the Central Bank of Belize, CBB, the International Finance Corporation, IFC, and the Canadian International Development Agency, CIDA, now underway in Belize City. The conference has brought together representatives from various financial institutions, utilities, insurance companies, credit unions and central banks in the region to information on credit reporting systems. In connection to this event, a press briefing was held this morning where representatives from the CBB, the IFC and SIDA spoke on works to develop Belize’s first Credit Reporting System. Deputy Governor of CBB, Marilyn Gardiner- Usher says the “credit reporting system is key to development of a sound economy.
" A well-functioning credit reporting system shares credit information provided by both financial and non-financial institutions, allowing lenders to more efficiently assess the credit worthiness of borrowers; resulting in more responsible lending and reduction in default rates, increased availability of credit history information which represents reputational collateral of individuals and micro and small and medium sized businesses enables these entities to gain access to financing at more favourable rates. Leveraging the potential to automate the credit decision process, increases the speed at which loans can be extended and further reduces the cost of financial intermediation. We expect that this too should play a role in driving down the cost of borrowing. Finally, through the provision of more comprehensive information the credit reporting system contributes to potential supervision of the financial system. In summary, a credit reporting system broadens and deepens individuals and small businesses participation in the formal financial system which is so very critical to the development of small economies."
According to Usher, a regulatory group already exists and they are working together with the IFC to develop a draft law.
"That law is already in draft stage. We’re looking at how we address confidentiality of data, the protection of data and consumer rights and remedies. What will be required to share any information will be consent of the borrower. In regards to that concern I think more so we should look at the benefits though of actually being able to put your good credit history information on the credit reporting system so that it can actually be used by those you want to borrow from or do business with to look at your good credit reputation."
The IFC has assisted for almost ten years spearheaded the development of private credit bureaus, creating improved credit bureaus in over twenty countries and today the Senior Manager of the Organization, Jun Zhang talked about the worldwide implementation of credit bureaus
"The credit bureau is an essential financial infrastructure that facilities all the transactions between the financial institutions and the borrowers where the money is needed. This would give the financial institutions that makes the lending decisions good information in terms of who they are lending money to. What we have seen worldwide, when there is a lack of information then there is severe constraints on the access to finance. This is particular true for the small business; the big companies, they often don’t have that much of a problem but for the small business. These elements are so critical that in the World Bank, Doing Business Index, probably you are familiar with, that ranks business environment in different countries; this is a very significant element to be used to evaluate the business environment of a country."
On his part Belize Liaison for CIDA, Phil Westman expressed how pleased the organization is to be partnering in this initiative and says he hopes that today’s conference will bring an edge to the already significant results that are coming out of the project. Overall the IFC has drafted or contributed to drafting of new laws and regulations in thirty two countries.