Credit given, where it’s due

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.” ■

—KEVIN McQUILLAN