Paper

Development of Credit Reporting Around the World

A comprehensive overview of credit registries
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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.