Al Etihad Credit Bureau said that it would soon launch a report that would allow banks to compare their performances to the overall market.
Ian Hodges, senior adviser at the credit bureau, said that its products and services were already helping banks bolster lending risk assessment and decision-making, but that the forthcoming benchmark report facility would help give to banks a better sense of where they stand compared to the market.
Mr Hodges was speaking at a forum for bureau subscribers, at which there were representatives from 64 institutions present.
“Data provided by Al Etihad Credit Bureau is becoming a core part of the financial institutions’ decision-making process,” said Marwan Lutfi, the bureau’s chief executive.
He added that inquiries made to the bureau increased 44 per cent compared to the previous year.
Dubai-based Mashreq said in April that the bureau’s introduction in the UAE initially led to a drop in the issuance of credit cards at the lender. Mashreq said that between the fourth quarter of 2015, when the bank started using the credit bureau, and the second quarter of last year, credit card approvals fell by 25 to 30 per cent.
The bureau, designed to help keep credit growth from overstretching and helping to prevent consumers and corporations from over-leveraging themselves, officially started operations in 2014. In April it launched a credit scoring system that it hopes will result in borrowers with good payment histories receiving better rates when applying for a credit card or loan. The scores will also eventually help residents secure lower insurance premiums, better payment terms with landlords and enhanced benefits with telecommunications and utility companies.
The UAE has one of the world’s highest rates of indebtedness at US$95,000 per household, banking executives say. The country also has one of the world’s highest incomes per capita.
mkassem@thenational.ae