Supporting the Establishment of Credit Bureaus: Three Model Scopes of Work and Diagnostic Checklists

The project aims to increase access to financial services and develop well-functioning markets worldwide. FS Share was awarded to Chemonics International under the Financial Sector Blanket Purchase Agreement, with a three-year period of performance from July 2008 through July 2011. The project's objective is to provide a package of flexible model scopes of work and diagnostic checklists to serve as blueprints for designers of financial sector development projects supported by the U.S. government. The checklists provide a framework to evaluate the preconditions in a given country for the successful development and implementation of three credit bureau models: a public sector registry, a private credit bureau, and a hybrid model that supports transitioning existing public registries to a private model. The model scopes of work, diagnostic checklists, and a technical brief were prepared by Jim Aziz of Baja Group Consultants for Chemonics International. The three credit bureau models are designed to support the establishment of credit bureaus in developing countries. A central bank credit registry is a repository of records of individuals' identifying demographic attributes and the payment history and manner of repayment of all their credit obligations. A private credit bureau, on the other hand, contains broader information, including data from non-bank financial institutions and other financial institutions not supervised by a central bank. A credit bureau offers products and services not available from a public registry and is normally a for-profit business. The model scopes of work and diagnostic checklists are designed to be flexible and adaptable to the specific needs of each country. They provide a framework for evaluating the preconditions for the successful development and implementation of each credit bureau model. The checklists include questions and criteria for evaluating the country's financial sector, regulatory environment, and institutional capacity. They also provide guidance on the design and implementation of credit bureau systems, including data collection, storage, and dissemination. The technical brief, Supporting the Establishment of Credit Unions, provides a comprehensive review of the three credit bureau models and their implementation. It discusses the benefits and challenges of each model, as well as the key considerations for their successful implementation. The brief also provides guidance on the role of credit bureaus in promoting financial inclusion and stability. The FS Share project has a dedicated team of experts who provide assistance and support to USAID missions in establishing credit bureaus. The team includes a project manager, deputy project manager, activity manager, supervisory team leader, and contracting officer. They can be contacted through the FS Share Rapid Response Hotline or through email. The establishment of credit bureaus is a critical component of financial sector development in developing countries. Credit bureaus provide a platform for lenders to assess the creditworthiness of borrowers, thereby reducing the risk of lending and increasing access to credit. They also provide a mechanism for borrowers to access credit and improve their financial inclusion. The model scopes of work and diagnostic checklists provided by FS Share are designed to support the establishment of credit bureaus in developing countries and promote financial inclusion and stability.