Credit Bureau to be joint venture between economic departments in Abu Dhabi and Dubai

In keeping with this, the Abu Dhabi Department of Economy and Planning (ADDEP) and the Dubai Department of Economic Development (DED) announced that they had signed a Memorandum of Understanding (MoU) to continue with the development of a Credit Bureau in the UAE as a joint venture. The Credit Bureau will be established using modern technological infrastructure to monitor the creditworthiness of individuals and organizations.

The historic agreement, which marks the first ever joint venture project between the two economic departments in Abu Dhabi and Dubai was signed in Abu Dhabi on July 3, 2005. H.E Mr. Salem bin Mohammed Al Daheri, Under-secretary in the Department of Economy and Planning, signed the agreement on behalf of the ADDEP while the DED was represented by Mr. Ali Ibrahim, Deputy Director General, DED.

Both the economic departments will share equal equity stakes in the venture, which will operate as an independent private entity. The credit bureau is considered a strategic initiative by both departments due to its impact on economic development, and will operate as a professionally managed entity in accordance with International standards.

The two departments also took this opportunity to express their appreciation to HE Mr. Sultan bin Nasser Al Suwaidi, Governor Central Bank of the UAE for supporting and encouraging the implementation of the project. The two departments also confirmed that the Credit Bureau project team would work closely with the Central Bank in order to finalize all initiatives necessary to successfully bring to completion a project of such strategic significance.

"The need for an independent credit bureau has long been felt in the UAE particularly with the country positioning itself as the region's foremost commercial hub," said Mr. Al Daheri. "The setting up of an independent credit bureau will add value to that goal by promoting economic growth and improving accessibility to risk management tools. We are happy to coordinate our efforts with the DED on a project of this stature and magnitude," he added.

"The credit bureau project has been driven by the DED's initiative to improve the operating environment for small and medium enterprises, through the establishment of an active and advanced system to monitor credit capability and improve availability of information about small business owners to lenders," said Mr. Ali Ibrahim, Deputy Director General for Executive Affairs, DED. "The increasing complexity of financial markets and freedom of capital movement across the globe have further underlined the crucial need for accurate and efficient credit reporting systems. We are working closely with the ADDEP to ensure that the project will offer extensive support to the business community in the country," he added.

Consumer credit bureaus are on the rise and more than 25 bureaus have been developed worldwide in the 1990s. The credit bureau under development is expected to add value to the UAE's image as a country that enables the use of standardized systems to measure the creditworthiness of companies. Both globally and regionally credit bureaus are usually maintained as commercial entities and this is true of other GCC countries such as Kuwait and Saudi Arabia.