MAJORITY of ordinary customers acquire credit services from non-licensed credit institutions and it is crucial that they be subject to disclosure policies such as those imposed on licensed operators says the Consumer Council of Fiji.
Council chief executive officer Premila Kumar made the comment following the Reserve Bank of Fiji's recent revision on disclosure requirements for licensed credit institutions.
The policy, Banking Supervision Policy Statement No.8B (Revised 2012): Accountability and Disclosure Guidelines on Interest Rates, Fees and Charges for Licensed Credit Institutions in Fiji, is the standardisation and details on fees, charges and interest rates that need to be disclosed to consumers and the public.
RBF said earlier the policy was applicable to Home Finance Co Ltd, Merchant Finance and Investment Co Ltd and Credit Corporation (Fiji) Ltd, the three licensed credit institutions in Fiji.
"While the council welcomes the revised policy by RBF, it is disappointing that the policy does not apply to credit providers not covered by the RBF," Mrs Kumar said.
"Credit providers like Carpenters Finance, Dominion Finance, Pacific Finance Corporation Limited and even hire-purchase providers like Courts do not come under the RBF's ambit of licensed credit institutions.
"The council has previously raised concerns that these credit providers are operating freely without being subject to any regulatory controls unlike those that come under the RBF. The absence of supervision and regulations is denying consumers their rights to disclosure and information."
She said most of the complaints against credit providers received by the council were against non-LCIs who she mentions have an unfair advantage over licensed credit institutions that have to bear the cost of regulation.
Meanwhile, Mrs Kumar said consumers could however see the positive changes.
"It will bring about more transparency and clarity in information given to consumers by credit institutions that will assist in making an informed decision," she said.