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Getting heavy with the bouncers

While Emcredit might not be able to predict such acts its alliances with institutions abroad is expected to minimise the occurrence of such incidences. Nine banks in the UAE have already signed up to Emcredit's general service, according to Bashar Qallab, CEO of Emcredit. Qallab, however, declined to comment on the number of banks registering with Embounce, but said the company was looking to enlist every bank throughout the county.

"There is a lot of interest in Embounce from the business-to-business sector and the banking sector in general in the UAE," he said.

The fees banks will have to pay for the service have not been announced yet and will be disclosed once the service is available at the end of August.

"We're just finalising a few things at the moment. There will be different methods of retrieving information and consequently different prices.

"The prices, however, will be reasonable. It's more of a strategic proposal for the government of Dubai, which is the sole shareholder in Emcredit, as opposed to being a purely financial one for Emcredit," said Qallab.

Qallab believes the product could add great value to banks' operations and traders in general. The service will mostly benefit small businesses and individuals that cannot currently access information and get reports without substantial business or commercial reasons, explained Qallab. That said, individuals will also be able to access their own records and see who has retrieved information about them.

"You will have to retrieve a self-inquiry report which is something we're finalising at the moment," he said.

The service has been in the planning phase for "quite a while", according to Qallab. At the moment Emcredit is looking for the right distribution channels.

"Banks can register now. There are banks that we are already talking to about this product.

"Obviously we have relationships with banks that have signed agreements with us for other products and other areas so that's already in the pipeline but there will be other channels to reach different types of customers, the business-to-business customers, the traders and others," he said.

On the back of cooperating with international institutions, Qallab explained that the process would take time as sending data overseas is "not easy". Extensive research must be conducted after which collaboration will start with one country at a time. Qallab hopes that at some point, Emcredit would be able to exchange information with leading international credit reporting agencies such as Equifax and Experian.

One of the main aspects of Embounce is its technical infrastructure. "This is a fully online business which enables us to cater to the advanced technical needs of our clients," Qallab said with confidence.

He added that the service marks the first phase of a long-term relationship with Dubai Police, which will be further strengthened by other credit reporting solutions in the near future.

Emcredit

Emcredit is an independent organisation established by the Dubai Department of Economic Development (DED). The company works side-by-side with UAE banks to provide sufficient data on individuals and businesses. Located at the DIFC, Emcredit plans to announce a range of credit reports to consumers and enterprises soon.

Founded in January 2006, under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, Emcredit aims to provide effective credit information solutions that allow lenders to monitor credit repayment capability and improve availability of information about borrowers.

What is a credit bureau?

Credit bureaus are companies that assemble and disseminate reports on the credit worthiness of consumers. In many cases, they are information-sharing arrangements that mitigate the risk of asymmetric information in credit, insurance, and other markets.

The successful implementation of real-time credit bureau systems around the world has been proven to reduce the time required for loan approval from days to mere minutes.

The main functions of any credit bureau revolves around protecting financial institutions against unnecessary credit risk exposure; protecting consumers by guarding them against financial mismanagement; reporting information which positively or negatively affects credit worthiness. This is done through the facilitation of credit information sharing and facilitating large volume access to uncollateralised credit by reducing the cost and turnaround time of credit evaluations and decisions.

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