NASSAU, BAHAMAS – The establishment of a Bahamian credit bureau should help improve the country’s Ease of Doing Business ranking with regards to getting credit, according to Central Bank Governor John Rolle.
Rolle underscored the need for credit reporting reforms and the strengthening of this nation’s bankruptcy laws at a quarterly press briefing yesterday.
“There was nothing in that process in which the country regressed or stepped back,” he said.
“The legislation has been passed and we are in the final process of licensing the bureau operator. The credit bureau will be up and operating next year.”
Rolle said financial institutions will begin to provide information to the bureau next year.
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.
Rolle continued: “What is important to understand is that it is referring to the fact that we still need some more legal reforms so that the information systems lenders rely on improve.
“Credit reporting is one of them. The other aspect is The Central Bank has been asked to work on a chattel registry. Also our bankruptcy laws need to be strengthened. The Credit Bureau in a itself will significantly lead to an improvement in terms of those ratings.”
However, Rolle cautioned any improvement in ease of doing business report must correlate with tangible improvement in the ease of doing business processes.
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 World Bank’s Ease of Doing Business ranks 190 countries against each other based on how the regulatory environment is conducive to business operation and stronger protections of property rights.
Economies with a high rank (1 to 20) have simpler and more friendly regulations for businesses. The Bahamas is now ranked 119th out of 190 countries on the World Bank’s 2020 Ease of Doing Business Index with a Doing Business Score of 59. 9.
The Bahamas drops back to a ranking it received in the World Bank’s 2018 report.