THE arrival of the nation’s first credit bureau is going to be good news for some – but bad news for many borrowers.
It is estimated that just under a third of Bahamian borrowers will struggle to obtain loans because of past failures to disclose existing debts.
The chair of the Clearing Banks Association, Kenrick Brathwaite, warned that people who do not provide full information to the bank will be the ones at risk, adding: “We’ve never had the ability to verify whether you pay your rent, your utility bills on time. Whether you are telling the truth with regard to what you already owe.”
That might sound good in principle for lenders – but our payment systems are imperfect things. There have been numerous occasions when, for example, websites to make payments for utilities have not been working properly. The playing field is not entirely level.
Meanwhile, different lenders have also had different processes – if someone has answered all the questions asked of them, they should not be penalised for questions they were not asked.
This is not to excuse those who haven’t paid as they should – rather to say that the credit bureau should only be one part of the jigsaw. It is only as good as the information it receives. Everywhere else has to raise their game to ensure the information they provide is thorough and not marred by inaccuracies or missing information.
We would also hope that credit decisions are applied evenly. There have been many stories of family, friends and lovers being allowed to run up huge bills without paying – will the politically connected who have avoided such payments be turned away, or will they continue to benefit from the strings they can pull?
And what of those who cannot get loans – which can already be hard enough? Will there be tighter laws to prevent them from falling into the hands of loan sharks?
There are all manner of questions – such as the ability to challenge inaccurate records. It is, however, a step towards the kind of financial systems seen elsewhere in the world.
As the country starts to emerge from the pandemic, the availability of money to kickstart the economy is going to be crucial.
We hope the credit bureau can be a step towards helping financial institutions offer more loans, knowing the level of risk they face, rather than serving as another reason to say no.
Crucially, this will hopefully bring to an end the situation where those who can pay won’t pay. We’ve already seen the problems, for example, surrounding the student loans that have gone unpaid. That harms the lender, that also harms the next generation of students who are left with no money to be able to borrow.
People not paying their bills at BPL or at the Water and Sewerage Corporation make everything more expensive for everyone else.
This credit bureau brings in a level of accountability, and makes sure people live up to their promises – or face the risk of not being able to borrow more in the future. Why, after all, should a bank throw good money after bad?
The more money flowing around our economy the better for getting back to normal – and that is important for our individual and collective futures.
Learn from others
Anyone following the progress of vaccinations overseas will note that most nations are seeing a sharp increase in the number of jabs being given out, albeit from a slow start.
As we prepare for our own programme, we would do well to learn how those nations have managed to increase the uptake of such vaccinations.
For example, one of the things to learn is that we should make the most of offers to help. In other countries, vaccinations have been offered by workers beyond the regular hospital staff. Can dentists offer jabs, for example? Some businesses whose doors have remained shut have offered to open them to serve as clinic spaces for vaccines to be given, including the use of refrigeration spaces where suitable for the vaccine on offer.
Across the archipelago, we need to work out the best way for vaccines to reach the various islands – so we’ll need hands for transportation in the right conditions, whether by plane or by boat.
If we receive 40,000 doses of the vaccine, that covers 20,000 people, each of whom receives an initial shot then a booster two weeks later. Can we set up 50 sites across The Bahamas to give out 400 shots in a single day each? Can we ensure by the time the vaccine is received, the 20,000 recipients are identified, confirmed and ready with their sleeves rolled up on day one?
We’re behind other parts of the world in getting the vaccine – let’s be ahead of them on being ready to go from the very start.