A system of credit rating in Antigua and Barbuda is expected to be implemented this month, beginning with commercial banks and credit unions licensed by the Eastern Caribbean Central Bank (ECCB).
In 2017, the Antigua & Barbuda Bankers’ Association supported the move, saying that it was a welcome change for effective loan financing.
The establishment of a credit bureau will help financial institutions better assess a lender’s ability to repay their loans based on their history of borrowing.
Information like a business or individual’s total level of debt and their repayment history will be collected from sources such as banks, credit unions, government agencies, hire purchase firms and other credit institutions, to assess whether they can be trusted to pay their debts (credit worthiness).
The ECCB announced on Friday that it had issued a license to CreditInfo ECCU to begin providing credit reporting services in the Eastern Caribbean Currency Union (ECCU) from December.
“The ECCB sees the work of the credit bureau as critical to improving the ease with which people in the region can access finance,” it said in a statement.
The expectation is that credit reporting will make the loan application process simpler and more efficient as credit providers will be able to access the applicant’s history from a central point.
It will also allow individuals or businesses seeking credit, to use good credit history as a form of collateral.
The system will be rolled out in all countries that use the EC dollar including Anguilla, Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Montserrat, Saint Lucia, Saint Christopher (St Kitts) and Nevis, Saint Vincent and the Grenadines.
The process will be facilitated in Antigua using the country’s Credit Reporting Act 2017.
The act makes provision to provide for a fair and an accurate credit reporting system within the financial system in order to assure objective credit decisions; to enable credit information sharing and reporting; to provide for the regulation of the conduct of credit reporting and credit reporting services; to provide safeguard for data protection for customers of credit providers; to provide for a single space in the regulation of credit reporting and for related matters.