Central Bank to ‘widen’ creditor reporting list

Central Bank to ‘widen’ creditor reporting list
The Central Bank of The Bahamas logo.

NASSAU, BAHAMAS – The Central Bank will soon widen the list of creditors that will have to report data to the Credit Bureau, the bank’s Governor John Rolle revealed yesterday.

Speaking at a Monetary Policy Committee press briefing, Rolle said: “It is the Credit Bureau that will set the stage to remove some of this uncertainty and help lenders to better single out lower risk borrowers.

“To promote the credit bureau development the Central Bank will soon define a wider list of creditors other than financial institutions that would have to report data to the Bureau so that the information covered can be as comprehensive as possible.

“This includes the utility companies, certain tax information sources and categories of private businesses that might be important sources of credit.”

Rolle could not say yesterday when the Bureau would be in a position to issue it first reports on borrowers to lenders but noted that based on estimates it is not expected to be a lengthy process.

“That is a process which we antiquate we would have gone through the first round over the course of 2020,” he said.

“As soon as the Bureau receives its first input of data it would be in the position to provide initial analysis that is if some use to the financial institutions.”.

A Credit Bureau effectively acts as a central database that lenders can use to obtain a more complete, accurate picture of the risk  and creditworthiness presented by a particular borrower.

The Bahamas was ranked 152 out of 190 countries with regards to getting credit in the World Bank’s 2020 Ease of Doing Business report.

The country’s credit bureau was launched last month, during which time Deputy Prime Minister and Minister of Finance K Peter Turnquest described it as an important and integral step toward an improved credit culture in The Bahamas.

Rolle yesterday noted that from a monetary policy perspective, the Central Bank’s strategy is to continue to support forbearance for borrowers in the hurricane-damaged islands, particularly for those who have the capacity to take on more debt to finance their recovery needs.

“More central to the recovery, we will continue to monitor the restoration of financial services in Abaco,” he said.

“These services have already returned to a more satisfactory state in Grand Bahama. In Abaco, conditions will be much more improved by the end of the first quarter, with greater access to ATM facilities, and with more temporary branch structures in place.

“By the end of the quarter, the Central Bank will also have extended the Sand Dollar or digital currency pilot to Abaco, to help with the recovery of basic payment services,” he said.

“Our medium-term policy posture is not being altered. We will sustain our efforts to reduce the excess levels of liquidity inside the banking system, by selling off more of the Central Bank’s holdings of government debt.

Rolle added: “High liquidity still represents a medium-term vulnerability because it could promote a higher than desirable rate of lending, and unsustainable spending on imports. We are also focused on reducing excess capital on commercial banks’ balance sheets, and staying aggressive in getting the private sector credit delinquency rates much lower.”