Proposed credit firm to sell data to UAE banks
DUBAI: UAE banks will have to buy information they need on the financial position of borrowers before they embark on lending when a landmark credit data firm is launched, the central bank governor was reported as saying.
Sultan bin Nassir Al Suwaidi said the planned Credit Information Company would provide data on individual borrowers and local small firms seeking loans from the country's 23 national banks and 28 foreign units.
In comments published in the semi official Arabic language daily Alittihad, Suwaidi said such information would allow the banks to obtain complete and accurate data on any client before they approve any loan. "The credit information company being established will cover only individual borrowers and small firms seeking loans....banks wishing to get information about those borrowers will have to buy data from the company," he said.
"This of course will enable banks to get full and accurate information about the clients seeking loans as the information to be provided by this company will be comprehensive...it will include the size of the existing debt of the individual or firm and their financial obligations inside the UAE, including those owed to national establishments such as Etisalat and the electricity and water firms."
Suwaidi said the central bank is coordinating with the Ministry of Finance to devise the organisational structure of the planned credit company, adding that the company would be launched once it is approved by the federal cabinet.
"As for the central bank, it is ready to immediately supply the technology and programmes needed to operate this credit information system, which will constitute a comprehensive credit information bank."
The Ministry of Finance said in mid 2010 it was conducting a study on the creation of a credit information bureau in collaboration with the central bank. "Establishing a federal credit information centre is a positive step and will be a huge support for lenders, borrowers and the macro-economic stability of the UAE. It will also enable lenders to gain a more comprehensive view during their decision-making," said Younis Khouri, the Ministry's Director General.
Emcredit was initiated by Dubai's Department of Economic Development in 2003 and is the first private and independent credit information services company in the country. - PB News