The United Arab Emirates has a population of around 9,036,000, of which approximately 1,175,000 (13%) are Emiratis. 87% of the population (7,862,000) are expatriates, mainly coming from the Indian sub-continent and Europe. The UAE was ranked 23rd in last year’s Ease of Doing Business report which was issued by the IFC and World Bank, and the country’s GDP is expected to increase by around 4.4%, confirming its high-growth potential.
In February 2013, CRIF was selected by Al Etihad Credit Bureau as a solution provider based on its proven track record in the development of credit information systems as well as its ability to deliver innovative, value-added services on a global level.
Mr. Marwan Ahmad Lutfi, CEO of Al Etihad Credit Bureau, said: “We’re working closely with CRIF to implement a world-class credit reporting system across the UAE, adopting the highest international standards as part of our strategic plan to enhance transparency and stability throughout the country’s financial sector. Sound credit reports on individuals are now available to banks and financial institutions and the next step will be to focus on the commercial arena, collecting data and providing credit reports on all companies operating in the UAE.”
CRIF and Al Etihad Credit Bureau are currently collaborating to complete three project phases:
1. Development of the consumer credit bureau in 2013/2014
2. Followed by the development of the commercial credit bureau in 2014/2015
3. The provision of value-added services (bounced check report, portfolio monitoring and skip tracing solutions).
CRIF is supporting Al Etihad Credit Bureau in the establishment of a world-class and scalable credit bureau, which will enhance the profile of the UAE’s consumer credit market and the country’s global competitiveness.
Increased transparency across the UAE’s financial sector will ease the flow of credit to businesses and consumers by improving the credit granting process and reducing default rates, as well as promoting responsible lending and borrowing practices.
The federal credit bureau will help banks to make informed decisions through an advanced and automated model based on credit references. As a result, lenders will be able to deliver financial services at significantly reduced costs and expand credit to wider segments of the economy.
UAE lenders will be able to make faster and more accurate decisions based on a detailed credit profile of borrowers and improve their risk management. At the same time, the availability of a full credit history will give UAE consumers and businesses a better understanding of their financial obligations and creditworthiness and allow those who maintain a good credit profile to access credit more easily and obtain more favourable loan conditions.
“The federal credit bureau will play a fundamental role in the development of a mature credit culture in the United Arab Emirates’ financial system, further supporting business growth in the 7 emirates. As CRIF has already experienced in many other countries, evolution of the financial sector depends heavily on the availability of effective information systems which streamline credit risk management and consequently support the financial needs of businesses and consumers”, explained Enrico Lodi.
About Al Etihad Credit Bureau
Al Etihad Credit Bureau was established by Federal Law No. (6) of 2010 (dated 7 October 2010) regarding Credit Information. It was formed as a Public Joint Stock Company operates under the Articles of Association No. (18) of 2011 issued by the UAE Cabinet of Ministers (dated 5 July 2011).
It is mandated to collect, tabulate and report credit information and data with the objective of enhancing the UAE’s financial and regulatory infrastructure. Both consumers and companies will be able to access the consented credit reports that include vital stats, credit information, payment behavior and other information that assists lenders and customers in making responsible lending or borrowing decisions, understanding debt obligations and exposure and accessing credit facilities in line with international best practices.
