(First Published in New Era Newspaper - 4 June 2014)
Is it
possible for the Government of Namibia, through the Bank of Namibia, to wipe
all our bad credit information off the blacklist? I do not want to have the
debt written off, but rather just have every consumer in Namibia start with a
clean slate as far as their credit record is concerned.
I believe
this will help address the issue of access to credit for those Namibian that
can afford credit. Many of these consumers may have paid their debts in full –
and are in a position to afford credit – but their access is blocked by
negative credit information still being stored on their credit record. This writing
off of the “bad history” will ensure that consumers who can afford credit can
be able to access it. It is presently difficult to get credit, it is expensive and
this holds back growth. Access to a sustainable credit market is essential to
all our development goals, especially Vision 2030.
The Bank of
Namibia (BoN) announced on 29 August 2013 that the proposed draft regulations
to regulate credit bureaus in Namibia are now open for public consultation. The
BoN states “There has been recent
speculation in the media around whether or not credit bureaus are illegal in
Namibia. The Bank of Namibia’s view is that the existing credit bureaus in
Namibia are legal entities registered in accordance with the relevant laws by
the Ministry of Trade and Industry.
That means they are not illegal. What is
missing in our legal system at the moment is a specific law regulating how
these entities should manage the information under their care, and there is no
centralized credit information system that allows banks and other lenders to
know the total exposure per client and their credit history so as to avoid
overextending of consumers.”
What is a credit bureau?
A credit
bureau (sometimes called consumer reporting agency or credit reference agency)
is a company that collects information from various sources and provides
consumer credit information on individual consumers for a variety of uses. Credit
information such as a person’s previous payment of loans or accounts is a
powerful tool to predict their future behavior. Through the collection of such
information lenders such as banks and micro-lenders can assess credit
worthiness, the client’s ability to pay back a loan. This information can also affect
the interest rate and other conditions of a loan.
Currently Namibian
credit providers are under no obligations to supply information to credit
bureaus. It is against that background that the proposed regulations will seeks
to establish rights and obligations of credit bureaus to be registered and
licensed by the Bank of Namibia. It is also proposed by the BoN that all credit
bureaus are to have a centralized system. Such a system should have the capability
of calculating total credit exposure per client, and requires that all credit
providers are to supply information to all credit bureaus. The Regulations also
provide clear guidelines pertaining to the kind of data to be collected, the
period of time information can be kept (retention period) etc.
Consumer
activists, community organisations and the media must keep this issue in the
public eye to ensure that the credit bureau and the respective regulations are
made in such a way to ensure fair credit reporting practices.
As a start,
we must make sure that all credit bureaus adhere to the following minimum
guidelines:
- Provide a consumer with information bureau’s files and to take steps to verify the accuracy of information disputed by a consumer;
- If negative information is removed as a result of a consumer's dispute, it may not be reinserted without notifying the consumer in writing;
- Credit bureaus may not retain negative information for an excessive period.
