Department of Economic Development (DED) has announced the completion of a feasibility study highlighting the viability of establishing an independent credit bureau in Dubai.
A global credit bureau operator and consultant, with experience in the region, was tasked with surveying the existing environment in the United Arab Emirates (UAE) and designing an implementation plan to bring the credit bureau project closer to realization.
During the course of the study, the consultants met with leading banks, insurance companies, public utilities, and government entities in order to better understand the UAE market environment. During the same period, officials from the DED visited regional credit bureau operators in order to gain insight into the repercussions of implementing a credit bureau in the region.
“The financial sector in the UAE is maturing at an accelerated rate, where lending has now exceeded 50 percent of GDP,” said Director General of DED, Mohammed Ali Alabbar. “With the liberalization of the financial services industry an ongoing process, we are confident that it is an ideal time to introduce a tool that promotes improved risk management, and advocates better market transparency.”
The study defines that the chief benefactors will be lending community and safeguard them from debtors. “By the same token the borrowing consumer will also be safeguarded in that they will no longer be able to attain debt levels beyond their repayment capability,” Alabbar added.
'In implementing this project the department will pursue every effort to ensure that the bureau will be the net effect of the banking community's collective desire to improve the quality of credit held within their portfolios.'
The establishment of the bureau will require the development of the appropriate legislative infrastructure governing data sharing. This will need to deploy sufficient checks and balances to guarantee that both consumers and bureau users are protected under the auspices of the law.
The bureau will be an entirely independent entity, isolated from users and data suppliers. “The function of the bureau will be to connect all the dots in the lending picture, not make value judgments, which will be at the discretion of the user, “ said Alabbar.
DED was established in 1992, with the objective to organize, regulate and boost trade and industry within the Emirate of Dubai. One of its key functions is to encourage local and foreign investments in commercial and industrial projects, and create the appropriate environment for investors. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
