DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.

(19 economies)Note: A reform is counted as 1 reform per reforming economy per year.Source: Doing Business database.FIGURE 6.3Private credit bureaus provide more comprehensive services to lenders% of private% of publiccredit bureauscredit registriesService provided0255075Lists both individuals and firmsDistributes both positiveand negative informationDistributes data on all loansbelow 1% of income per capitaGuarantees that borrowerscan inspect dataDistributes more than2 years of historical dataDistributes data from retailers,trade creditors or utilitiesSource: Doing Business database.100facilitate the creation of a private creditbureau. Azerbaijan, Belarus and the formerYugoslav Republic of Macedoniaalso reformed.The most popular credit informationreform feature was providing onlineaccess to members. The regional publiccredit registry of the Central AfricanMonetary Union made information accessibleto banks online. That led toexponential growth in coverage in Cameroon,Chad, the Republic of Congo andGabon. Sri Lanka’s credit bureau andWest Bank and Gaza’s public credit registryset up systems allowing banks toupdate information and obtain creditreports online.Many economies issued regulationsTable 6.3Who has the most credit information and the most legal rights for borrowers andlenders—and who the least?Legal rights for borrowers and lenders (strength of legal rights index, 0–10)MostLeastHong Kong, China 10 Burundi 2Kenya 10 Madagascar 2Malaysia 10 Rwanda 2Singapore 10 Afghanistan 1Australia 9 Bolivia 1Bahamas, The 9 Djibouti 1Cambodia 9 Syria 1Denmark 9 Timor-Leste 1New Zealand 9 Palau 0United Kingdom 9 West Bank and Gaza 0Borrowers covered by credit registries (% of adults)MostLeastArgentina 100 Nepal 0.24Australia 100 Algeria 0.20Canada 100 Djibouti 0.18Iceland 100 Mauritania 0.17Ireland 100 Ethiopia 0.13New Zealand 100 Madagascar 0.07Norway 100 Yemen 0.07Sweden 100 Nigeria 0.06United Kingdom 100 Zambia 0.05United States 100 Guinea 0.02Note: The rankings on borrower coverage reflected in the table include only economies with public or private credit registries (129 in total).Another 52 economies have no credit registry and therefore no coverage. See Data notes for details.Source: Doing Business database.FIGURE 6.2GETTING CREDIT 31Rankings on getting credit are basedguaranteeing on 2 subindicators borrowers access to theircredit information. Egypt issued suchRegulations onregulations nonpossessory for the private credit 62.5% bureau.33% 33%Georgia security interests amended its civil Strength code of with legalthein movablerights index (0–10)same property purpose. In the former YugoslavRepublic of Macedonia a 37.5% new law on33%Depth of creditpersonal data protection guarantees thatinformation indexborrowers can review their (0–6) data in thenew public credit registry. In BelarusScope, quality and accessibilityand of credit Tunisia information new laws through allow public individualsand firms private to credit inspect registries their credit data inall central bank offices. Morocco publisheddo not count new for the circulars rankings. See guaranteeing Data notes for details. thatNote: Private bureau coverage and public registry coverageborrowers can review their data in creditregistries—and laying the groundworkfor new private bureaus.Other economies eliminated theminimum threshold for loans recordedin credit registries. Sri Lanka’s privatebureau started using a new online systemto collect data on all loans, regardlessof value. Coverage grew threefold, toaround 1.3 million individuals and firms.Azerbaijan saw coverage more than doubleafter eliminating its minimum loancutoff of $1,100. So did Belarus, afterabolishing its $10,000 cutoff. Mauritiustoo eliminated its cutoff, of $3,000.Tunisia now collects and distributesmore detailed information—bothpositive and negative—on borrowers.Sri Lanka extended the length of timeinformation is recorded from 1 year to2—and distributes positive informationfor 5 years. Indonesia now distributes 2years of historical information. Vietnamextended the period that data are distributedfrom 2 years to 5. That helps explainits 49% increase in coverage, to morethan 8 million individuals and firms.Finland passed a new credit informationlaw that regulates the use of corporatecredit data.Two economies saw developmentsthat reduced the efficacy of their creditinformation systems. Indonesia’s privatecredit bureau closed, unable to competewith the public registry (figure 6.3). AndBurundi was forced to double the minimumcutoff for loans registered in thedatabase to around $900, to cope withtechnical limitations and a sudden increasein loan transactions.(c) The International Bank for Reconstruction and Development / The World Bank