Law changed to make credit reporting more effective

In a move to give financial institutions better access to information contained in financial transactions, the National Assembly on Thursday passed a more enabling legal framework, to allow for mandatory participation, with regards to the delivery of credit reporting services.
The Credit Reporting (Amendment) Bill 2015 which was given the full nod by the National Assembly, is expected to strengthen and ensure the Credit Bureau functions effectively.

Minister of Finance Winston Jordan, who brought the Bill to the House, noted that there has been no impact nor benefit to the lenders, borrowers and economy as a whole, since the passage of the original bill, and the subsequent establishment of the Credit Bureau.
According to the Government Information Agency, the Credit Reporting Act of 2010 governed the operations of the Credit Bureau in Guyana. It designated individuals and businesses as potential data subjects, which means that the Bureau can maintain credit records of these entities in its database, which in turn will form the basis on which these subjects can prove their creditworthiness.
Minister Jordan pointed out that two years after its establishment, the Bureau was having no impact on its intended beneficiaries for the reason that the legal framework to support the delivery of credit reporting services in Guyana was never put in place. Further, the issue of credit reporting was participatory in nature.

The amendment, he noted, corrects that by changing four sections of the principal Act; Sections 11, 12, 13 and 14, to basically mandate borrowers and lenders’ participation in the Credit Bureau’s operation.
As per the amendments, the credit information providers are now required to submit a request to the Credit Bureau with the view of obtaining credit information. They are also now authorised to upload credit information to a licensed credit bureau without the consent of consumers.

In explaining the move to ensure the effectiveness of the body, Minister Jordan noted that credit bureaus are essential elements of accounting financial infrastructure in any country. He pointed out that an effective and efficient credit bureau would allow for broad access to credit, and support responsible lending. They also help in stabilising the financial sector.
Minister of Business Dominic Gaskin, who also took the floor in support of the bill, noted as well that the amendments are to give life to an entity that is about to expire, and to do so, before it had a chance to make its contribution to the economy.
The Minister also extolled as well the long-term benefits of having a credit bureau operating in Guyana. “We are dependent on our development of being able to provide credit to fund investment in Guyana, and this bill helps us to so,” he noted.

Also speaking in support of the bill were opposition Members of Parliament (MPs) Bharrat Jagdeo, Irfaan Ali and Joseph Hamilton, who also urged caution in ensuring all the necessary infrastructure needs are in place before moving to this mandatory stage.
Opposition MP and Shadow Finance Minister in the House, Irfaan Ali, is of the view that a mandatory credit report is not the answer to the issue, perhaps at this stage of Guyana’s development where it might only complicate the issue more.
He believes that for the credit bureau to function in an effective and efficient manner, “we must ensure that the infrastructure that is needed to make good the recommendations, is in place and functioning properly”.
Opposition Leader Bharrat Jagdeo, in his presentation, said the PPP/C is in support of any legislation that will see a properly functioning credit bureau in Guyana. “…we recognized that the purpose of the credit bureau is to improve the quality of credit in the country and to make our financial system more resilient,” Mr Jagdeo said.
He, however, made it clear to the House that, “credit bureau or no credit bureau, the financial system in Guyana is a strong one”.