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Credit rating revamp ‘silliest decision ever’

May 11, 2016

Australian media have waded into the Data Bureau controversy describing the decision as ‘one of the silliest decisions ever’ by Fiji.

The Aussies have taken an interest because ANZ and Westpac have come under direct attack by Aiyaz Sayed Khaiyum for “their perfectly reasonable decision to back a local credit reporting agency called Data Bureau.”

A columnist for the leading Australian Financial Review says “A well-functioning company operating with the implicit support of the Reserve Bank of Fiji has been closed for no cogent reason.”

The paper goes on to give the history and credentials of Data Bureau, saying international companies will be hurt by the decision.

“Data Bureau’s sudden closure without consultation or warning does not augur well for those doing business in Fiji or with Fijian companies.

“As of last week no Australian exporter to Fiji has been able to conduct a credit check on a Fiji buyer of their goods and services. This service was used by exporters to Fiji.

“The Data Bureau closure is tantamount to government appropriation of private property. It raises doubts about the country’s commitment to supporting private enterprise.”

Khaiyum criticised ANZ and Westpac after they put their names to a press release issued by the Association of Banks in Fiji (ABIF), which said the shutdown of the Data Bureau would clear the credit records of the vast majority of good borrowers and have a negative impact on the entire Fijian economy.

“The inability now to be able to search a person’s credit history will greatly increase the risk levels within the personal lending market,” the ABIF said.

“Lenders will have little option but to increase interest rates to compensate for this increased risk.”

Many remain bewildered by what appears to be a rushed and poorly-conceived decision to regulate the credit rating agency with lawyer Richard Naidu offering this view:

“The Government (cheered on by the Consumer Council of Fiji) seems to think that if it wipes out negative credit information on everybody in Fiji, then we will all have some kind of quasi-constitutional right to borrow money. In fact, now that no one has a credit record, cautious lenders will mean it is harder for us to borrow. Lenders will always find ways to protect their money. The only question is how much it will cost the rest of us.”

Naidu and other critics could be proved wrong but Khaiyum’s track record would suggest otherwise.

Source – C4.5; Poswted by Waisea Varani for SWM

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