UAE’s Al Etihad Credit Bureau Says It’s Operationally Ready

The UAE’s much-awaited federal credit bureau is “operationally ready” and is prepared to launch services, it announced on Sunday.

The Al Etihad Credit Bureau has completed all the necessary testing and all the final steps of its pre-operational phase, including a security audit of the system, penetration testing and a complete system review, an official statement said.

The bureau’s pre-launch phase also included signing agreements with all UAE financial institutions for the submission of credit data and connecting all the retail banks to the credit bureau system.

Its official operational launch will take place once the bureau’s by-laws have been published in the Official Gazette, the statement added.

Marwan Ahmad Lutfi, CEO of Al Etihad Credit Bureau, said: “Al Etihad Credit Bureau is striving to set a new global benchmark in the accuracy of credit data capture. This will support the bureau in its role to provide reliable and thorough credit reports that add significant value to the way risk is assessed in the UAE financial industry.”

Up to 25 lending institutions in the country, which control around 96 per cent of the retail credit market as of Q1 2014, have “crossed the bureau’s credit data accuracy threshold of 93 per cent”, and have provided the required information, he added.

The bureau will help financial institutions ascertain the creditworthiness of consumers in the country and prevent rampant over-borrowing.

“Once the credit bureau goes live, there will be consequences for a short period. Banks will stop lending because they will discover every single customer has over-borrowed,” Abdul Aziz Al Ghurair, CEO of Dubai lender Mashreq and chairman of the UAE Banking Federation told Gulf Business last year.

By providing relevant data, the bureau will help banks in the country make informed choice about lending, he said.

“It is great news for the economy to have this credit bureau come up, it’s a missing link in the UAE infrastructure.

“It will dramatically minimise default rates, improve pricing for the customer and improve the risk charge on personal loans. So it’s a really healthy scenario,” he said.

Al Etihad Credit Bureau was established under federal law in 2010, and is expected to be launched in four stages with a completion date of 2015.