Credit reporting

THE consumer watchdog will closely monitor the services of the newly-established Credit Information Reporting Agency PTE Ltd (CIRA) to ensure consumers’ credit information is correct, collected fairly and their privacy protected.

Consumer Council of Fiji chief executive officer Premila Kumar yesterday made the statement in response to the announcement by the Reserve Bank of Fiji on granting a licence to CIRA to conduct business in Fiji as a credit reporting agency.

A statement from RBF said CIRA had applied for a licence to operate as a credit reporting agency in July 2017 and after a comprehensive assessment was granted a licence on March 29, 2018.

CIRA, a newly established company owned by local investors, is the first credit reporting agency to be licensed under the Fair Reporting of Credit Act 2016.

RBF governor Ariff Ali said credit reporting would benefit both the lenders and borrowers, and in turn increases economic activity.

He said it was therefore important that the business of credit reporting operated within a framework that realised these benefits and the framework therefore was through the Act and Regulations, and supervision by the Reserve Bank of Fiji.

Mr Ali said CIRA’s entry would again service an important need of lending institutions with credit information sharing reducing information asymmetry between lenders and prospective borrowers, and also assist borrowers who could use their good credit histories to enhance their borrowing capacities.

He said on a broader level, CIRA’s business complimented the role of the Reserve Bank in maintaining financial stability, and assisting the ease of doing business in Fiji.

Meanwhile Ms Kumar said the council always wanted such business to be regulated so that consumers could hold them accountable, unlike the Data Bureau which operated without any ground rules and without any accountability to the consumers.

“Lending institutions can minimise their risk by having access to credit information before making the loan decision.

“Credit history will improve the lender’s risk assessment process and lending institutions can make loan decisions quickly and not take months.

“It will also reduce the costs of assessing borrower risk.

“Consumers will benefit because of competition and lower credit prices in the market. New lenders can enter the loan markets easily without having to spend large sum of money in establishing credit worthiness of its clients,” she said.

Meanwhile with the licensing of CIRA, interested credit information providers and credit report recipients will be advised of the appropriate time to submit their applications to the Reserve Bank of Fiji, for registration, as required under the Act.