Emcredit to collect 80% credit data by 2009

Emcredit has set an ambitious target to collect 80 per cent of credit-related data from financial institutions across the UAE by the end of next-year.

The firm is going ahead with the plan despite the pending ratification of the UAE Federal Credit Information Law, which is expected to oblige all financial firms in the country to submit data to a central credit bureau.

Zaid Kamhawi, Chief Business Officer of Emcredit, says the UAE's first private credit information services company currently has 20 per cent of banking data, 35 per cent of mortgage data as well as 5.6 million consumer identification records.

"Currently, we estimate to have 20 per cent of banking data and we want to achieve 80 per cent coverage by the end of 2009," he told Emirates Business.

"To do that the 80-20 rule will apply. Our main target is the top 20 per cent of the UAE's 53 banks because the top 11 or 12 banks hold 80 per cent of the data."

The firm, which is regulated by the Dubai Financial Services Authority, recently began to share data with several government departments including Dubai eGovernment, Dubai Police, Dubai Public Prosecution, the Department of Economic Development, the Dubai Land Department and its subsidiary, the Real Estate Regulatory Authority.

It has also signed private network partnerships with Dubai-based financial firms such as Dubai Bank, Citibank, Dubai Islamic Bank, Noor Islamic Bank, Amlak Finance and Better Homes.

"Since 2006 we have been focusing on gathering data and creating awareness among our stakeholders and clients as well as policymakers. We now have a number of clients from the financial services and real estate sectors and government departments using our information," said Kamhawi.

He said though a federal law on credit did not yet exist, Dubai financial institutions were already obliged to provide data to Emcredit folllowing a decree from His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

"We are a private entity so we are not able to enforce laws, but the law [Sheikh Mohammed's decree] is there and all we have to do is operate on a service level.

"So we meet financial institutions and government departments and tell them what credit-related info we need and in return we offer our services to them."

However, analysts say the absence of a credit law at the federal level means Emcredit cannot ensure banks and credit companies provide data. "At the moment the federal law is something that is still being reviewed at the UAE Cabinet level," said Kamhawi, who represented Emcredit on the technical advisory committee, which helped draw up the legislation.

"We can't estimate when the law will gain approval but we hope this is something of high priority to the government."

Chris Dommett, Chief Executive Officer of John Charcol Dubai, told Emirates Business that the country's banks at present had to rely on documents such as income statements to put together the credit history of each applicant instead of using a credit bureau.

"Dubai is in the process of setting up a credit bureau," he said. "However, the issue of having a credit bureau has been talked about for almost a decade. I remember from my banking years 10 years ago that the Central Bank was asking all the banks to contribute to a central credit database but it didn't really take off."

Kamhawi said: "We do not affect the decisions of banks or mortgage companies. We can only provide factual data information but the decision will still come from them."