Banks asked to look beyond CRIB when loaning money

• CB says pandemic has created new situations where need arises to look beyond CRIB score 
• Says taking part in debt relief programmes won’t have a negative implication on a borrower’s CRIB score

The banks have been asked to look for more than one’s Credit Information Bureau (CRIB) score when granting loans, as the assessment of creditworthiness solely based on this score may not always give the true picture, given the circumstances created by the virus restrictions.
The Central Bank last week unveiled its fourth borrower relief package to provide concessions to the businesses and individuals who got hammered by the fresh restrictions imposed by the government since the third week of April to battle COVID. 
But any new applications for fresh loans by these borrowers should not be declined purely based on their CRIB score, the monetary authority said in a bid to ensure continuous access to liquidity, particularly by the micro and small businesses, whose cash flows suddenly stopped or at least greatly disrupted.
“Licensed banks shall not decline loan applications from eligible borrowers under this scheme solely based on an adverse CRIB record,” the Central Bank said in reference to the borrower relief package introduced last week. 
The CRIB score reflects the past and present track record of an individual in honouring his/her loan commitments and creditworthiness, which is used as the most easily accessible and the most effective determinant for one’s eligibility for a loan by banks. 
However, since last year, the government was looking at the possibility whether the banks could look beyond one’s CRIB score in a bid to expedite credit flows into the economy, as many borrowers were already in difficulty even before the virus struck them last year, due to the broader slowdown in the economy. 
In any case, the banks have more knowledge of their own clients and thus could already be looking above the CRIB record in supporting their clients in times of great difficulty because it is in their own interest to have a solvent client and working economy. 
Meanwhile, the Central Bank said that the participation in the credit relief scheme would not have a negative implication on a borrower’s CRIB score. 
“Licensed banks, in consultation with the CRIB, shall develop a reporting modality to report deferment/restructuring granted under this scheme, so that participation in the scheme will not have impact on the credit score of borrowers in the future or be negatively reflected in the future CRIB reports,” the Central Bank noted.