Credit given, where it’s due

Paradise - - Strictly Business -

Pa­pua New Guinea has risen 14 places in the World Bank’s an­nual Ease of Do­ing Busi­ness re­port. The re­port has sin­gled out a new pri­vate credit bu­reau as hav­ing im­proved the credit in­for­ma­tion sys­tem in PNG.

Bruce Mackin­lay, man­ag­ing di­rec­tor of the Credit & Data Bu­reau, says that the or­gan­i­sa­tion is im­prov­ing the coun­try’s trans­parency and ac­count­abil­ity.

Mackin­lay says the num­ber of trans­ac­tions be­ing cov­ered by the bu­reau has grown sharply. “We had a quiet start: 2009 was our first full year, and in that year we did about 4300 trans­ac­tions. Now we are av­er­ag­ing about 16,000 a month.

“It is a bit hard to es­ti­mate how our mem­bers (PNG’s lenders, such as banks) ben­e­fit from the credit his­tory check when they de­cline a loan be­cause of that, but anec­do­tally we know our mem­bers avoid a lot of is­sues when they don’t take on cus­tomers who have a poor credit his­tory.

“We do have an ac­cu­rate mea­sure­ment of how much our mem­bers have re­cov­ered through list­ing their de­fault­ers on the data­base – it’s now over PGK203 mil­lion since we com­menced.”

Mackin­lay says the bu­reau’s credit re­port­ing at the mo­ment is only on de­faults or failed pay­ments, but there is an in­ten­tion to ex­pand.

“We haven’t got to the stage where we have moved into pos­i­tive re­port­ing: de­tails where peo­ple are pay­ing off their loans with no prob­lems at all.

“That is prob­a­bly go­ing to hap­pen in the next 12 to 18 months. We will be work­ing with mem­bers and our soft­ware providers.”

Mackin­lay says the bu­reau has more than 290,000 con­sumer records and 21,000 com­pany records.

Mackin­lay was se­conded to the Bu­reau after re­tir­ing as a school prin­ci­pal, hav­ing taught for 40 years in PNG.

He says the avail­abil­ity of credit his­to­ries is mak­ing for much greater trans­parency and ac­count­abil­ity in fi­nan­cial deal­ings.

“If you are a com­pany or an in­di­vid­ual with a poor credit his­tory then life is dif­fi­cult and your records are go­ing to re­flect that. If you are a com­pany that has never had an is­sue and you are a bor­rower, it is a pos­i­tive. If there is no ad­verse in­for­ma­tion that makes it a lot eas­ier for the bor­rower.” ■


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