The Al Etihad Credit Bureau will enable lenders to use credit scores to potentially fix errors on your credit report, drawn from a database in the same way that is common practice in the Western world.
Until now, banks in the UAE have been unable to access consumer data at other financial institutions when lending, which has led to a situation where some have borrowed from multiple lenders and run up huge personal debts.
Defaulting on debt is deemed a criminal, rather than a civil, offence in the UAE, with those unable to meet repayments facing jail sentences.
According to The National website, the bureau’s vice-chairman and undersecretary of the Ministry of Finance Younis Al Khouri said that a chief executive had not yet been hired, but the “second layer has already been hired or will join in the coming days”.
The Al Etihad Credit Bureau has also purchased the IT platform from CRIF, an international firm that is specialised in providing loan origination and lending software, The National reported.
The Ministry of Finance established Al Etihad Credit Bureau last year as a stand-alone entity, owned by the federal government and supervised by the Central Bank.
The bureau will initially compile a comprehensive database of individual borrowers, allowing it to provide their credit information for the preceding 24 months, with a mention of any defaults that might have occurred over the preceding five years.
Another comprehensive database of all commercial companies operating in the local marketplace, including joint-stock companies, will also be compiled. Financial information on borrowing by government companies will also be included in this database.
By July 2014, the final phase is expected to be completed whereby the bureau will be able to provide a rating for customers, individuals and companies, according to an in-house risk-weighting system.
Abu Dhabi may have a new financial centre to rival Dubai’s DIFC before the end of 2013. To read more, click here.
