National Assembly approves Credit Reporting Bill |25 October 2023
Members of the ruling party, Linyon Demokratik Seselwa (LDS) have approved the Credit Reporting Bill, 2023, which was presented by the Minister for Finance, National Planning and Trade, Naadir Hassan, during yesterday鈥檚 sitting.
The bill aims to establish a system to collect and maintain听information about different services/facilities provided by financial institutions. It will replace the existing one.
According to him the bill stems from a plan approved in 2014, for the development of the financial sector.
鈥淎 key element in the plan is to put in place a new credit information system (CIS), with the appropriate law, that I am presenting before the assembly today,鈥� he said.
The minister stated that at present there was a regulation, in place since March 2012, which allows institutions providing credit facilities to give out details about their clients that have taken out loans or are guarantors to loans, in a system that maintain credit information.
However, several concerns have been raised over its legal aspect, said the minister, citing several weaknesses that have been observed over the years.
These included the fact that information were being put into the system, manually, creating risk of human error, the system was not functioning at its optimal capacity, the credit status of an individual referred to the present state of the debt and not details of their repayments.
鈥漈his means the institution does not have the individual鈥檚 repayment history,鈥� he explained.
Minister Hassan added that the regulation did not make clear provision for complaint by a client, as well as cost associated to access of information and each institution was setting their own fee, at their discretion.
鈥淎nother weakness was that the Central Bank could not penalise an individual or institution in contravention of the regulation, without having to go through a legal procedure in court,鈥� he stated.
It should be noted that the system would still be managed by the central bank, which would also put in place a new system that would allow those institutions providing credit facilities to connect automatically to the CIS.
Minister Hassan also noted that the bill makes provision for those other institutions not under the auspices of the central bank to also have access to the system and give out information about their clients. These include PUC, companies doing financial leasing, insurance companies, telecommunication and revenue commission.
鈥淭he bill is based on international standards. Efforts have been made to take into account our local context,鈥� said the minister, adding it was also in line with government鈥檚 plan to eventually transform the economy, turning it into a digital system, facilitating access to financial services.
The members that spoke on the bill highlighted the various hassle that exist today especially with regard to time wastage, lack of information and additional paper work when carrying out financial transactions.
The elected member for Beau Vallon, John Hoareau, said the system would bring additional financial stability in the country, allowing the banking institutions to understand their customers鈥� behaviour, thus rendering a quicker and more efficient service.
This was echoed by the elected member for Les Mamelles, Bernard Georges, who said he was glad the minister has reassured the house that the existing weaknesses in the financial sector would be addressed by the new bill.
All 19 members from the ruling party present voted in favour of the bill.
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Patsy Canaya