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UAE to implement phase one of national credit bureau from July 2013.

July 2013, sees the roll out of phase one of a national credit bureau system in the United Arab Emirates (UAE), the new platform will

enable financial institutions in the Arabian Gulf state to verify credit ratings and history prior to approving customer


Al Etihad Credit Bureau, which was set up by the UAE federal government in early 2012, confirmed at a press conference, that it will

start collecting consumer credit data from a pilot panel of financial institutions from the early part of the third quarter.

Collection data will include, information divulged on individual customer credit applications, payment behavioural patterns and debt

records from lenders, other financial services providers and also telecommunications and utility providers.

Younis Al Khoori, chairman of Al Etihad Credit Bureau outlined some of the benefits to be gained from the government agency's initial


AoAs well as helping lenders make faster and more accurate credit decisions, the information held by the credit bureau will help

individuals to understand and improve their credit worthiness, and potentially lower the cost of credit for good borrowers,Ao he


AoThe International Finance Corporation recently reported that the probability of obtaining a small bank loan for a small business

increases from 28 per cent in countries without a credit bureau, to 40 percent in countries that do have a credit bureau,Ao Al Khoori


Al Etihad reported that the second phase of the implementation programme will realise the launch of a commercial bureau, phasing out

the need for bounced cheque reporting in the process. Phase three will encompass the introduction of value added services for

lenders, while the fourth and final phase will deliver individual credit scores based on historical data.

No detailed timeline for the implementation of future phases was provided.

Lenders are largely positive about the project, as credit bureau data on a countrywide basis will allow them to assess a credit applicant's

existing liabilities across a full range of institutions and establish a far more accurate picture of true creditworthiness than at present. It

is also seen as a route toward speeding up the approval process and of course a reduction in the cost of risk insurance, although

perhaps diminishing the number of loans awarded.

Copyright Andy McTiernan. All rights reserved.

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Publication:Andy McTiernan Property & Economy Bulletin
Geographic Code:7UNIT
Date:Jun 9, 2013
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