By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s governor yesterday warned that unpaid tax liabilities and utility bills will factor into Bahamians’ credit scores once the nation’s first Credit Bureau begins issuing reports to lenders.

John Rolle, speaking after the regulator designated Bahamas Power & Light (BPL), the Water & Sewerage Corporation, Bahamas Telecommunications Company (BTC), Cable Bahamas and Aliv as providers of information to the credit bureau, said utility bill - as well as loan - repayment “track records” will ultimately factor into assessments of Bahamians’ creditworthiness.

“People should understand that the information sources that go into credit assessments are quite broad in other countries,” he told Tribune Business, “in terms of areas where people have unpaid liabilities. People need to be mindful there will be a continued review of information sources that matter.

“We have studied what would be relevant in terms of the tax register. The [Credit Bureau] Act references tax liabilities. We continue to review registers that relate to certain tax liabilities to determine what would be the best approach and type of information.”

Mr Rolle said Bahamians must “understand that if somebody is assessing you for creditworthiness and looking at your credibility, whatever track record you have out there, it’s going to predict the risk profile you have from lenders. To the extent people are generally current with those obligations, they benefit from having that type of information included in their scoring profile”.

The Central Bank governor added that the Credit Bureau had already begun to collect borrower information from financial institutions, although he conceded there might be “an isolated institution” that had yet to make its first data submission. Money lenders that fall under the Securities Commission, as well as insurers that extend credit, also have to submit client details to it.

The creation of a Bahamian credit bureau has been over a decade in the making, with the initiative first unveiled by the Central Bank in 2010. It has long been viewed as a vital “missing link” in The Bahamas’ credit architecture, with its absence depriving lenders of a centralised information repository they can draw on to better understand a borrower’s credit profile and risk of non-repayment.

Among those required to supply information to the credit bureau by the Credit Reporting Act will be commercial banks, insurance companies, credit unions, financial and corporate services providers, the Bahamas Mortgage Corporation and Bahamas Development Bank. Others likely to be added in the future are auto dealers and furniture stores that extend credit to customers, and even the government’s revenue agencies.

The credit bureau will then compile and organise this information in a credit report provided to lenders, which will help them assess the risk provided by each loan applicant and reject those with poor histories.

Meanwhile, the Central Bank announced yesterday that it has finished redeeming one-cent coins - which are no longer legal tender - after collecting 55.74m pennies valued at $557,400 through an exercise that began on October 1, 2020, and lasted until end-June 2021.

“The 118-day redemption exercise was facilitated by Central Bank representatives at various locations in New Providence, Grand Bahama, Exuma, Eleuthera, Long Island, Abaco and Andros,” the Central Bank said. “Other Family Island redemptions were facilitated through arrangements with island administrator offices. During the exercise, 8,440 persons redeemed approximately 55.74 million pennies valued at $557,400.

“The Central Bank acknowledges that a sizeable amount of the coins that were not redeemed by the public are unlikely to be in anyone’s possession inside The Bahamas. Over the last half century, more than 700 million one-cent coins were issued to the public.

“Although some are still held by locals, others have been either lost or permanently taken out of the country by travellers, whether intentional or not. The bank will share more analysis on these particulars in due course.”