ABU DHABI: A long-awaited federal credit bureau will start operating in the United Arab Emirates this quarter, allowing banks to check a customer's financial health before extending new debt, the state-owned company said on Tuesday.
Al Etihad Credit Bureau expects to complete agreements with banks to provide credit information and create an electronic database by the end of January, it said.
"As soon as this is achieved, along with receiving formal approval of the bureau's regulations and credit report charges from the UAE Cabinet, the Al Etihad Credit Bureau will commence operations," chief executive Marwan Ahmad Lutfi said in the statement.
Pilot phase testing has been successful with more than 90 percent accuracy achieved, he added.
Until now, banks in the UAE have often been unable to access data on consumers at other financial institutions when making lending decisions.
This has allowed borrowers to obtain money from many lenders and run up big debts which sometimes prove impossible to repay.
The idea of a UAE credit bureau was talked about for years, but a previous attempt in 2006 by the Dubai government to set up a private sector credit bureau, Emcredit, failed as banks refused to divulge customer data. (Reuters)