The establishment of a Credit Bureau in the Eastern Caribbean Currency Union moves closer to reality, as the Eastern Caribbean Central Bank (ECCB), and the International Finance Corporation (IFC) collaborate to finalise the draft Harmonised Credit Reporting Bill and Regulations.
The Harmonised Credit Reporting Bill and Regulations System will apply to Grenada and other members of the Eastern Caribbean Currency Union.
The ECCB is receiving technical assistance and advisory services from the IFC, with financing from the Canadian Department of Foreign Affairs, Trade and Development, for the ECCU Credit Bureau Project. The objective of the project is for the IFC, and the ECCB to collaborate on the establishment of the regulatory and supervisory framework to support an advanced credit reporting system in the ECCU.
A news release from the ECCB said, once the draft legislation is approved, the next step in the process of the establishment of a credit bureau in the region is the issuance of a Request for Proposal to allow potential credit bureau operators to submit bids indicating their interest in operating a regional credit bureau.
According to the IFC’s Credit Bureau Knowledge Guide (2006), “a credit bureau is an institution that collects information from creditors and available public sources on a borrower’s credit history. The bureau compiles information on individuals and/or small firms, such as information on credit repayment records, court judgments, and bankruptcies, and then creates a comprehensive credit report that is sold to creditors.” Credit bureaus are crucial building blocks that enable greater access to financing for both individuals and small businesses.
“A credit bureau in the ECCU, will therefore improve citizens’ access to loans from financial institutions, and will help to reduce the cost of borrowing,” the release added.