Despite the financial instability and uncertainty among a wide section of the population due to the COVID-19 pandemic, Central Bank Governor John Rolle stressed that work toward establishing the country’s first credit bureau and assessing the credit worthiness of Bahamians will continue.
The credit bureau formally launched in January this year, with business information company CRIF S.p.A. starting the data collection process on Bahamian credit holders, with a target of early 2021 to start the issuance of credit scores.
Rolle said despite the hardships many Bahamians may fall upon during this health and economic crisis, the rollout will continue.
“There’s no intention to suspend the credit bureau rollout process. We need to appreciate as well that the way we manage our personal credit is also relative to the general environment, which persons operate within. There should certainly be continuous efforts to maintain contact with financial institutions to manage any hardships that you are experiencing as a borrower, because at the end of the day, all of those will factor into assessments of credit worthiness,” he said during a quarterly economic briefing with the media earlier this week.
“This is a macro event, meaning that it impacts, indiscriminately, a wide cross section of the population and from that point of view, credit bureaus are equipped in dealing with those in terms of understanding how to assess the relative credit worthiness of individuals.”
According to the Central Bank’s Monthly Economic and Financial Developments (MEFD) report for March, total private sector arrears grew by 7.5 percent or $47.7 million in the month of March, with short-term arrears – those behind by 31-90 days – climbing by 23.1 percent or $45.1 million and non-performing loans (NPLs) increasing by just 0.6 percent or $2.6 million.
Rolle said while the Central Bank anticipates the NPLs category to grow even more due to the COVID-19 crisis, banks are well-prepared to absorb those losses.
“We have not yet seen any negative movement of the non-performing loans related to COVID-19. We anticipate that there will be some increase and there is a lot of work going on around that. But, more importantly, we believe that the banks have comfortable levels of capital,” he said.
“As a matter of fact, the capital level in our domestic banks is far in excess of the internationally recommended levels.”