Development of Credit Reporting Around the World

This presentation discusses the following issues:

• Importance of credit reporting and how it affects credit markets;
• Differences between public and private credit registries;
• Privacy and credit information sharing: the key elements of an effective legal and regulatory framework.

The presentation describes:

• Usefulness of credit information registries in decreasing information asymmetries, the accurate evaluation of risk, and in the increase of credit volume;
• Way in which credit information sharing expands lending by:
  • Reducing financing constraints for firms,
  • Making banks more efficient, helping them to save time and costs, and reducing default rates;
• European Union countries that have Public Credit Registries (PCRs);
• Presence of private credit reporting systems in the United States, Canada, the United Kingdom, and Nordic countries;
• Sources that submit information to public and private registries;
• Emerging elements of good practice for PCRs;
• Role of governments in establishing or strengthening credit reporting;
• Laws and regulations that create an enabling environment;
• World Bank Credit Reporting Systems project.

The presentation concludes that:

• Credit reports reduce the time and cost of providing credit;
• Public and private credit registries can complement one another.

It recommends that:

• Credit histories should be complete and the data should be available to an open user group;
• Regulatory framework should ensure consumer protection;
• Consumers should be educated about their rights.