Central Bank of The Bahamas (CBB) Governor Wendy Craigg has stated that the implementation of a credit bureau would cost approximately $2 million, adding that she hoped the government would present legislation for the establishment of the bureau by early next year.
Speaking with NB12, Craigg further stressed the benefits of establishing a credit bureau, such as offering risk-based pricing to customers, streamlining the credit decision-making process and lowering local banks' exposure to high-risk loans in the hopes of lowering operating costs.
After two months of consultation, Craigg said that CBB will issue a request for solutions by the end of the month for private companies to bid on providing a credit rating service.
CBB Legal Counsel Rochelle Deleveaux said the bank would ensure that the bureau remains viable by employing the services of an international private credit ratings company.
The "hub and spoke" model would utilize an existing credit bureau company operating in other jurisdictions with an office in The Bahamas.
Guyana used a similar system when it launched its first credit bureau in September 2013 through a partnership with Iceland-based credit bureau CreditInfo International.
Craigg suggested in an interview with Guardian Business earlier this month that establishing a credit bureau would help curb The Bahamas' bad debt, which cost the country roughly $1.6 billion in available credit between 2009 and 2013.
"An institution faces a lot of risk. They have to start provisioning, writing off the loans, so that eats into the capital that should be available for additional or further lending," said Craigg.
CBB launched the Bahamas Credit Bureau Project (BCBP) in 2010 with the intention of establishing a national credit reporting system in The Bahamas.
The BCBP is designed to assist borrowers with good payment history with access to lower collateral requirements and interest rates.
Once implemented, individual customers' credit reports would not contain any historical data or information on loans issued before the legislation becomes enacted, barring borrowers with outstanding judgments.
Arinthia Komolafe, managing director of the Bahamas Development Bank (BDB), stated earlier this month that the establishment of a credit bureau is long overdue.
Komolafe argued that the provisions of a credit bureau would

benefit local financial institutions immensely and improve the affairs of the average borrower in the

country.

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