And in the question and answer period, Michael also broke down how a credit reporting system should assist the smallest borrowers:
Kareem Michael, Governor - Central Bank
"What the credit bureau seeks to do, and you've heard it in both presentations, is, is to provide information, information that would then allow primarily those who issue credit to be more informed about the profile of that individual or that micro, small, medium enterprise, who is applying for some sort of credit. That information then gives that, lender some better, a much better assessment, of what the repayment capacity or credit worthiness is. With that level of information. You are then or that lender is able to then say, well, your interest rate or the terms of which I construct your loan is now this because you have given me this level of information."
"Without that information, what typically happens?"
"We tend to have practices that might just say a 8% across the board for all individuals and then a select few might be able to get something much lower."
"It reduces that across the tendency, by most individuals, I could be somebody who is not at a certain income level, but I have consistently paid my utility. I have considered consistently financing a loan from a money lender. And I think, that across the board the lending rate may not be fair to me because I have practice, good borrowing practices, and I'm showing that I'm a I'm a good borrower. So can I get a better lending rate. And this is what we're trying to introduce. Typically."
"The credit bureau often, exerts downward pressure on average lending rates in every jurisdiction where it's, where it's implemented."
Davide Meo, International Markets Director, CRIF
"Without a credit bureau, the judgment that, that, a lender does without being, finger pointing anybody, is based on subjective evaluation. Whilst when you've got a credit bureau up and running is objective. So that's one of the main differences."
The system is set to launch early next year. The cost for creditors to access a report was not disclosed today. We were told it is a "complex matrix."
