System will allow banks to check creditworthiness of borrowers, set to launch in phases from mid-2013
Banks in the UAE will be able to assess the creditworthiness of borrowers from this year, with the Gulf state’s credit bureau set to begin operations.
The Al Etihad Credit Bureau, which was initially founded in February 2012, will launch its first phase in the “middle of this year”, with other stages of the project set to be introduced in phases.
Under the new system, the credit bureau will collect data from financial institutions, telecommunications firms and government bodies in order to deliver credit reports to lenders and individuals. The reports will include details such as debt levels and other financial commitments.
Al Etihad Credit Bureau, which is administered by the UAE Central Bank, said it had completed putting in place the legislative framework needed for the bureau, and was in the final stages of completing IT systems.
“The full credit bureau services will be launched in phases to ensure a smooth integration of the new system, with the exact dates of rollout to be determined by the Federal Bureau once all research has been conducted and the relevant laws and infrastructure are in place,” Obaid Humaid Al Tayer, Minister of State for Financial Affairs and Chairman of Al Etihad Credit Bureau said in a statement.
When launched the UAE credit bureau could help banks to offer better rates on loans and other financial products for customers with good credit scores, and in theory could also help reduce the reliance on post-dated cheques as a method of payment.