Press Release - 12th November 2013

Getting Credit – how easy is it for you?
The World Bank has recently published the 2014 report of Doing Business. This annually published report is based on investigations of the regulations that enhance business activity and those that constrain it. From the information collated and reviewed, the authors use quantitative indicators to compare each country, providing a ranking on how easy it is to conduct business within each country. This year’s report looks at eleven areas of business regulation, from starting a business through to trading across borders, including a category on “Getting Credit”. Promoting access to finance for small and medium-size firms has seen an increased focus since the recent financial crises. Getting credit has significant impact on the economy, as it is a basis for growth and profitability of businesses. As the name suggests, Creditinfo’s core business is information in relation to credit, offering services to cover each stage of the customer life cycle. Reynir Grétarsson, CEO and owner of the Creditinfo Group of Companies explains “Among other things, our services help businesses evaluate prospective customers, monitor existing ones and manage the debts that they may have incurred. Basically, we collate data from as many sources as possible and provide it to those people who have a rightful reason to use that data. We carry out these services in accordance with the relevant legal framework in each of the countries where we operate.” Sharing information among creditors reduces the likelihood of financial crisis and increases growth. This is as a result of information asymmetries between banks and borrowers, enabling banks to make better lending decisions and increasing the probability of loan repayments. In addition to enabling the lender to make more informed decisions, it also allows the borrower to develop a good reputation for repayment, which they can use as collateral when applying for future credit. Trustworthy and reliable customers gain as they benefit from securing more favourable credit terms and conditions. The Doing Business report rankings on the ease of getting credit are based on three areas:    the sum of the strength of legal rights index; the depth of credit information index; and the coverage of the population of that country.

Although a Credit Bureau cannot change the law, Creditinfo is often influential in creation or changes of legislation. The establishment of an effective Credit Bureau within a country is an area that will improve the Getting Credit rankings, when executed in a professional manner, as a result of improving the ease to accessing credit. As a result it improves the relative position of a country when it comes to investment and business operation. This is supported in the Table 1 where a sample of the results have been taken from the Doing Business in 2014 report. The data depicts a measure showing the distance of each economy to the “frontier.” An economy’s distance to “frontier” is reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. For example, a score of 50 in DB 2013 means an economy was 50 percentage points away from the frontier which is constructed from the best performances across all economies and across time. A score of 80 for the same country in the report the year later would indicate the economy is improving. In this way, the distance to frontier measure complements the ranking given overall for the ease of doing business, which compares economies with one another at a point in time.

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The sample shown highlights four countries where Creditinfo have established a Credit Bureau. As a comparison, two regions where credit information sharing is renowned for excellence in this area (UK & USA) have been included plus a few other comparative economies with Credit Bureaus. Doing Business in 2014 - Distance to the “Frontier”
Economy United Kingdom Georgia
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Doing Business in 2006 100 31.25 93.75 56.25
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Doing Business in 2007 100 50 93.75 56.25 68.75 62.5 62.5 43.75 18.75 …. …. …. …. …. …. …. …. ….

Doing Business in 2014 100 93.75 93.75 87.5 81.25 68.75 68.75 56.25 50

Improvement 2006 v 2014 0 62.5 0 31.25 12.5 18.75 6.25 37.5 31.25

Notes:
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Creditinfo established operations in Georgia in 2005, since opening it has significantly improved operations assisting local banks and financial institutions.
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United States Ukraine
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Creditinfo have been shareholders in the International Bureau of Credit Histories (IBCH) & First Credit Bureau Ukraine (FCBU) since 2005.
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Lithuania France

68.75 50 62.5
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Creditinfo established operations in Lithuania in 2003, since then expanding its services to cover all aspects of credit risk management.
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Azerbaijan Kazakhstan Russian Federation Table 1

18.75 18.75

Creditinfo have been shareholders in FCBK, the first credit bureau established in Kazakhstan, since 2005.

Mr Grétarsson advises, “The success of a Credit Bureau is dependent on the continued support from organisations supplying credit information. Our clients around the globe are in various industries but they all have one thing in common – they all grant credit to someone else. They range from large financial institutes to SMEs with just a handful of employees. It is proven that our data further improves by adding credit information from retailers, trade creditors and utility companies, as well as from financial institutions.” Using systems and services similar to those of Creditinfo creates greater transparency and consequently, it levels the playing field for all involved, creating mutual trust between organisations and ultimately enabling the economy to grow. Creditinfo have recently launched operations in Guyana, Jamaica, Tanzania and will soon open in Barbados. The “Getting Credit” category rankings for Doing Business in 2014 for these countries are shown in Table 2. These rankings were from a total of 189 countries. These lower positions are due to the current greater constrains on the ease of getting credit. Creditinfo aims to support these markets to improve these rankings over the coming years. The support which Creditinfo delivers is equally marked by knowledge and expertise as it is by the advanced technical support. Economy Barbados Guyana Jamaica Tanzania
Table 2

Getting Credit Ranking - Doing Business 2014 86 170 109 130

These countries are the first of a new wave which will see greater access to credit over the next decade, in part due to the efforts of Creditinfo, facilitating improvements in the ability to do business. For further information: www.creditinfo.com • info@creditinfo.com

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