Friday 31 March 2023

500,000 people in Costa Rica could improve their credit situation. How?

Reform to the Personal Data Protection Project that is being currently discussed in the Legislative Assembly will validate that entities can review complete customer data to improve financial inclusion.

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31 March 2023 - At The Banks - BCCR

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QCOSTARICA – If in Costa Rica the compliance and non-compliance information (negative and positive data) were taken into account in access to loans, some 500,000 people could improve their credit condition in two years, with greater access to loans with better conditions and better understanding of their indebtedness levels.

The incorporation of this complete information is contemplated in the Proyecto de Protección de Datos Personales (Personal Data Protection bill) that is currently being discussed in the Legislative Assembly.

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Douglas Sánchez, Equifax’s new Regional Director for Central America, explains that Costa Rica is the only country in the region and one of the few in Latin America that lacks complete information on the financial consumer.

Equifax, a leading data, analytics and technology company, considers that it is necessary for Costa Rica to consider incorporating compliance and non-compliance information into loan evaluations, which will allow a complete vision of the person seeking a loan.

This Thursday, the Science, Technology and Education Commission began a review of  Article 55 of the Proyecto Protección de Datos personales (No. 23.097) text expressly mentions that entities can use complete credit data that would improve financial inclusion, reduce over-indebtedness and promote healthy credit.

According to this text, “the personal data related to loan behavior processed by the Credit Information Center (CIC) will be governed by the rules issued by the General Superintendency of Financial Entities (SUGEF), so that access to said data allows financial and credit assess the level of credit risk of its clients, respecting the guarantees, principles and rights granted in this Law”.

In this way, “the processing of personal data intended to inform about financial or credit solvency is expressly authorized, including data related to compliance or non-compliance with obligations of a commercial and/or credit nature that make it possible to assess contracting risks, commercial conduct and/or the payment capacity of the holder”.

It is estimated that the use of complete information can improve the credit situation of some 500,000 people, and another 300,000 people – low income and with restricted purchasing power – who were left out of the financial system by the Ley de Promoción de la Competencia y Defensa Efectiva del Consumidor (Law for the Promotion of Competition and Effective Defense of the Consumer), popularly known as the Usury Law.

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“In the current economic situation, it is useful to promote this reform given the risk that many people in critical financial conditions resort to drop-by-drop loans, which extort debtors,” added Sánchez.

For Equifax, the total delinquency status of people should be determined, verifying the total consumer behavior including the unregulated credit sector made up of the commercial segment (department stores, appliance stores, hardware stores); and telecommunications (telephone bills and electricity, cable and Internet services).


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