Emcredit’s approach offer loan on credit history

Borrowers who repay bank loans regularly must be rewarded with a lower rate of interest, an official of the UAE’s first credit bureau said.

But the flip side is that happy days for those who mess up finances are numbered. "A one-size-fits-all interest rate punishes the good borrowers," said Zeid Kamhawi, Business Development Director of Emcredit.

Banks sometimes offer premium rates to employees of companies perceived as low-risk. But since individual borrowers can drill holes into this blanket approach, lenders sometimes do a reversal by blacklisting employees from those companies.

Emcredit’s approach is to gather individual credit history allowing banks to automate loan approvals, said Kamhawi.

The bureau, which has 20 per cent of individual credit data, hopes to get 80 per cent of that from the UAE’s 53 banks by next year. One of its newest members is Citibank, which has signed up with emBounce. Established with Dubai Police, it provides lenders with the history of customers in honouring cheques from 2000.

Emcredit, formed in 2006 under Dubai International Financial Centre rules, has gathered 5.6 million identification records and has signed information-sharing deals with Dubai’s Real Estate Regulatory Authority, Public Prosecution, several banks and a real-estate firm, said Kamhawi. It plans to launch a credit record service for individuals next year.

The UAE Credit Information Law, to be passed this year, may allow UAE credit bureaus to share information with their counterparts outside, he said. Expats can also take credit history back to their home countries. Log on to www.emcredit.com.