| James Kon |
THE establishment of the Credit Bureau in Brunei Darussalam has benefitted the country by significantly improving the percentage of non-performing loans and raising the country’s overall ranking in the ‘Ease of Doing Business Report 2014’.
The Minister of Development, Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Awang Hj Suyoi bin Hj Osman, in his capacity as the Deputy Chairman of the Board of Directors for Autoriti Monetari Brunei Darussalam (AMBD), officiated the ceremony.
Managing Director of AMBD, Awang Yusof bin Hj Abdul Rahman, in his speech at the launch of the Credit Bureau service at the Dar Takaful IBB Utama building in the capital said, “Financial stability is one of the main agendas under Autoriti Monetari Brunei Darussalam and is an important element in achieving robust and dynamic financial infrastructure development.”
Since its establishment in 2011, he recalled, “AMBD has identified a number of initiatives for the development of national financial infrastructure in line with international best practices. One of the initiatives is the setting up of a Credit Bureau which is an important instrument in assisting banks and financial institutions to better manage credit risk.”
Healthy credit culture, Awang Yusof bin Hj Abdul Rahman said, “is a main factor in building a strong and established economy. Financial institutions need to practice due diligence accordingly regarding the disclosure of credit and repayment behaviour of borrowers before the loan can be approved. However the information needed is hard to obtain and takes a long time until it impacts the cost of operations, making it a credit risk.”
In addition, he said, “One of the main challenges faced by financial institutions and AMBD as a regulatory officer are non-performing loans. In 2009 this was recorded at 11.2 per cent.”
To overcome the challenge, he explained “AMBD started to implement the Credit Bureau project in August 2011. Within a year, the Credit Bureau project commenced operation and has been utilised by financial institutions since September 2012. Since August 2014, more than 150,000 credit reports have been used by financial institutions for the purpose of assessing a borrower’s credit rating.”
Through this effort and a number of AMBD guidelines relating to borrowing, he revealed that the percentage of non-performing loans has shown a significant decrease to 5.7 per cent in 2013.
The initiative of implementing a Credit Bureau was recognised by the World Bank as indicated in its ‘Ease of Doing Business Report 2014’ where Brunei Darussalam is ranked 55 out of 189 economies under the ‘Getting Credit’ category. This is a big leap in the rankings from 71 the previous year.
Brunei’s overall standing is now 59, which is 20 positions higher than the previous year.
The introduction of a Self Inquiry service for the public, he said “is a historic moment for AMBD. With this service, transparency is encouraged between banks or financial institutions with borrowers. It is also hoped that the new service can help the public raise their discipline in financial management by self-evaluating their respective financial positions in line with one of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam’s aspirations as part of Vision 2035 – to increase the people’s knowledge of finance.”