After more than two decades in operation, the Caribbean Credit Bureau (CBB) is on the verge of going out of business while a new “foreign-owned” full-service credit bureau is set to take its place, Barbados TODAY has learned.
The decision to wind down the operations was made on Friday, following a meeting between founder and CEO of the credit management firm Grady Clarke and the Fair Trading Commission (FTC).
The CCB had sought to get the FTC to step in and stop the new company from setting up in Barbados. But the credit bureau was told there was nothing the FTC could do, Barbados TODAY understands.
The new company, which is yet to be named by the Barbados Bankers’ Association (BBA), has already been established and is well
advanced in carrying out technical work with banking institutions, Barbados TODAY has been told.
With the help of the International Finance Corporation (IFC) – a private sector arm of the World Bank – the search and selection procedure for the new credit bureau has been carried out and a code of conduct has also been established, which should be followed shortly by legislation.
The announcement was first made public a year ago that the bankers association was in the process of examining the proposals of two international entities to decide which one it would be allowing to establish the local credit information-sharing system.
The new credit bureau could be officially introduced within the next two months.
But Clarke, who has been vehemently opposed to a foreign-owned credit bureau setting up shop in Barbados, told Barbados TODAY he was concerned that local authorities would allow such a move that would essentially force him out of operation.
About a dozen full-time workers and a number of volunteers will likely lose their jobs, he said.
A frustrated Clarke said that in the coming days he would have to resign from everything. For now, though, he said, it was business as usual “until such time that [subscribers] switch over to the new credit bureau”.
“I realize that I can’t survive,” said Clarke.
“Right now, I trying to see how can I be a responsible employer and send people home. I have already sent home staff quite a bit. I guess the end is near because of what the global predator called the IFC [has done],” he said.
Clarke said he has already informed the credit union league about the development and the subscribers would be informed that “the end is near because of policies and unfair competition”.
“What it means is that I am resigning from everything,” he said.
“We have to start preparing to wind down. We want to live longer but the end is near. Unless things change,” he added.
“All our confidential financial information is going to be owned by foreign entities,” Clarke declared.
“All of the hard work I have done here I am going to have to hand on a platter to the foreign credit bureaus that are coming in the region . . . The region is subscribing to information imperialism. Unless CARICOM [Caribbean Community], all of our heads of state including here in Barbados, do something about it, we will be information slaves in an information age to foreign companies instead of our own companies, local companies owning information,” he said.
Long-time banker Ian De Souza was chairman of a subcommittee set up by the BBA over a year ago to supervise the request for proposal process for the new credit bureau.
When contacted, De Souza told Barbados TODAY he was not prepared to respond to anything Clarke had to say. Pointing to the importance of a full service credit bureau, De Souza said this was necessary to help financial institutions and individuals make better lending and borrowing decisions.
“In addition to people now having full information, one major benefit of a credit bureau is that it prevents people from getting themselves into trouble. As a banker, having been in the industry for 40 years I can tell you that one of the most common ways that people get themselves into financial difficulty is by over-borrowing.
“Especially today when it is very easy to get credit cards, that is a way that people are over extending themselves. So when you have full information on a customer now you find that a bank will be quickly able identify where a customer is overstretched and they will deny the credit,” De Souza explained.
He said Barbados was “well behind” the rest of the world in relation to having a full-service credit bureau as part of its financial infrastructure.
“Barbados does not have full information on customers. So they don’t have the information resident in any one place. So . . . the bank has to rely on that customer to say where they have credit and how they are servicing that credit,” said De Souza.
Currently there is an informal arrangement where banks call each other to verify information on clients.
Ultimately the idea is to have non-bank financial institutions including micro-finance and other lending agencies, utilities and hire purchase companies share credit information on customers.