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What is Emcredit?

The Dubai Government has appointed Emirates Credit Information Company (Emcredit) as the official body for providing credit information services in Dubai. Emcredit, the UAE’s first and only credit bureau so far, has been in operation since 2006. Here’s a brief Q&A on Emcredit:

What is Emcredit? When was it set up?

Emcredit is the UAE’s first credit bureau which launched operations on November 25, 2006. Emcredit was created by the Dubai Department of Economic Development (DED) to work with UAE banks to provide real-time data on individuals and enterprises. At the time of inception, Emcredit planned to announce a range of credit reports to consumers and enterprises and to enlist every bank nationwide.

What does Emcredit do currently?

Emcredit works to provide real-time credit reports and credit history of individuals and enterprises. It has signed strategic agreements with a number of entities in the UAE to improve sharing of credit information and increase transparency. A pact with Dubai Police, for instance, enables people with a history of issuing cheques which bounce to be traced and identified quickly. The pact has also paved the way to develop other systems such as fraud detection solutions in future. Emcredit and Dubai Chamber of Commerce and Industry have also signed an MoU to support the business community. Under the terms of the agreement, Dubai Chamber and Emcredit will cooperate to raise awareness of the role of credit information and facilitate trade credit between businesses. This will allow businesses to enhance their credit risk management processes and sustain business growth in a prosperous trading environment.

What does the new decree mandate Emcredit to carry out?

The decree issued by Shaikh Mohammad mandates Emcredit to comply with the criteria and instructions stipulated by the DED and with the instructions and guidelines issued by the UAE Central Bank, when processing credit information. The move will help financial institutions access credit data on companies and individuals before deciding on loans and extending credits. Subscribing institutions will be able to access these data that will help them to assess the risks associated with debtors. The decree also lays out the legal and operational framework for Emcredit and mandates it as the entity responsible for providing credit reporting services in the emirate, with responsibility for collecting, storing, analysing and disseminating credit information in Dubai.

How will the new decree help Dubai’s economic sector?

The decree comes as part of Shaikh Mohammad’s keen interest in enhancing transparency in Dubai’s economic sectors, as well as creating legislation to develop further the credit reporting industry in the emirate. The decree comes as a strong move towards complementing Dubai’s economic infrastructure, driving growth and improving the assessment capabilities of lenders operating in the emirate. It is in line with the government’s vision of supporting small and medium enterprises (SMEs) and reducing obstacles to accessing credit. The decree will play a significant role in fostering a conducive environment for data sharing and will bring greater confidence to all stakeholders of the credit reporting industry, enhance the privacy of data of individuals and companies, and support credit decision-making.

Who will Emcredit work with in fulfilling its current responsibility?

Emcredit is expected to work with a variety of agencies and institutions to carry out its mandate. The decree stipulates all credit information providers, such as banks, financial institutions and government bodies operating in Dubai, to provide Emcredit with all the required credit information records required by it to render its credit information services.

How safe is the data compiled by and entrusted to Emcredit?

According to the decree issued by Shaikh Mohammad, Emcredit is mandated not to use, disclose or divulge credit information in its possession to others except in accordance with the provisions of the decree; to uphold the company’s information security and protect information from any loss, damage, illegal or unsafe access, use or amendment, including having disaster recovery and data backup systems; to establish a regularly updated database containing all matters related to credit information and credit information reports, and to prepare accurate, real and documented credit histories, and review and handle their contents in an accurate and secure manner.

Here’s a quick timeline of the evolution of UAE’s first and only credit bureau so far:

MAY 3, 2010: His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in his capacity as the Ruler of Dubai, issues Decree No. 8 of 2010, which identifies Emcredit as the appointed body for providing credit information services in Dubai. The decree mandates Emcredit to comply with the criteria and instructions stipulated by the Dubai Department of Economic Development and with the instructions and guidelines issued by the UAE Central Bank, when processing credit information. The move will help financial institutions access credit data on companies and individuals before deciding on loans and extending credits.

APRIL 5, 2010: The Ministry of Finance (MOF) says it is preparing legislation to establish the country’s first centralised credit bureau for individuals and corporates. “A federal corporation is being envisaged to provide comprehensive services and solutions related to credit information,” the ministry says in a statement. "It will be tasked with preparing reports, statements and credit ratings to help the financial institutions take appropriate lending decisions.” A spokesman for the ministry said the subject is still under study and no timeline has been set for sending an official proposal to the Cabinet. However, it is unclear whether Emcredit will be involved in the creation of the federal bureau.

NOVEMBER 14, 2009: Emcredit and the Dubai Chamber of Commerce and Industry announce the signing of a Memorandum of Understanding (MoU) in a move to support the business community. Under the terms of the agreement, Dubai Chamber and Emcredit will cooperate to raise awareness of the role of credit information and facilitate trade credit between businesses. This will allow businesses to enhance their credit risk management processes and sustain business growth in a prosperous trading environment. Emcredit and Dubai Chamber also decide to organise a series of conferences and round-table discussions to promote credit information sharing among businesses.

OCTOBER 21, 2009: Emirates Islamic Bank (EIB) signs an agreement with Emcredit to use its credit information reporting services. Through Emcredit’s Credit Scope, which provides factual records of a company's or individual's credit history, EIB aims to gain an accurate perspective on its borrowers’ repayment history as well as their capability to service new and existing debts.

JULY 5, 2009: Emcredit announces it plans to publish quarterly “credit-related” economic indicators. The Dubai Government-owned credit bureau said it is finalising a report titled 'Q1-2009 Business Activity Report' to be issued later in the summer, to be followed by more reports gauging credit risk indicators and employment figures. In a statement, Emcredit managing director Ali Ebrahim says the company plans to gather information from a variety of places including banks, the government and law enforcement agencies.

JANUARY 31, 2009: Emcredit says it has secured the ISO 27001 certification - an accreditation for information protection and security. The company says in a statement that it is now among a small number of credit bureaus in the world to receive this endorsement. Emcredit is certified by TUV NORD Middle East, a division of TUV NORD CERT GmbH providing comprehensive inspection, testing and certification services, based on national and international regulations and standards.

SEPTEMBER 22, 2008: People with a history of issuing cheques which bounce can now be quickly traced, thanks to a new pact between Dubai Police and Emcredit. A data sharing agreement is signed between Dubai Police and Emcredit to help develop a credit reporting tool providing comprehensive and up-to-date records on defaulted cheques reported to Dubai Police. Under the deal, Emcredit will able to provide its subscribers access to police records of defaulted cheques issuers. The pact will also pave the way to develop other systems such as fraud detection solutions in future.

APRIL 18, 2007: Emcredit says it is playing an integral role in providing industry know-how to a federal technical advisory committee tasked with creating a federal regulatory framework for credit information sharing across the UAE. The news comes as the UAE is in the process of creating Federal Data Privacy Commission to regulate the credit rating business and all aspects relating to data privacy, says Bashar Qallab, the CEO of Emcredit.

NOVEMBER 25, 2006: The UAE’s first credit bureau launches operation, hoping to offer banks, companies and individuals accurate information on borrowers. Emcredit is constituted as an independent organisation created by the Dubai Department of Economic Development (DED) to work with UAE banks to provide real-time data on individuals and enterprises. The new company is located at the Dubai International Financial Centre (DIFC) and plans to announce a range of credit reports to consumers and enterprises in the near future. Bashar Qallab, Emcredit CEO at the time, says the service hopes to enlist every bank nationwide and could share information with major international credit reporting agencies such as Equifax and Experian in the future.

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