Law Reform and Regulated Credit Reporting Systems in Commonwealth Small Island Developing States: A Study of Jamaica

This chapter reflects on commercial law reform activities in the Small Island Developing States (SIDS) of the Commonwealth Caribbean. The particular focus is on regulated credit reporting systems (CRS), specifically the introduction of a CRS into Jamaica. Although the chapter will touch on the theoretical and historical international development of CRSs, Jamaica’s experience will be the focal point of the content as the research findings present interesting implementation issues that could be of relevance to other SIDS. Internationally, CRSs have operated for some time in larger developed countries, such as the United States of America (US) and the United Kingdom (UK), allowing for the entrenchment of their benefits in domestic credit markets. However, these countries have the financial and legal infrastructure to support the operation of an effective CRS. In contrast, developing countries present with either outdated or the absence of necessary financial and legal infrastructures to support the operation of a regulated CRS. Jamaica’s financial sector meltdown of the late 1990s, included in this chapter analysis, took place before CRS regulation was introduced and highlights the deleterious effects that can transpire in a country’s financial sector in the absence of such financial credit market tools. The World Bank and its Group members, such as the International Finance Corporation (IFC), have, over the last few decades, focused on promoting the implementation of a regulated CRS by its member countries. As this case study indicates, for Jamaica the introduction of a CRS had a net positive effect on the financial consumer and business credit market; but its experience was not without problems both in implementation as well as in its impact on Jamaica’s population, which is diverse in its location, education levels, and propensities toward the use of different modes of regulated and unregulated sources of credit. These issues are not unique to Jamaica but are likely to be present in neighbouring SIDS that undertake the introduction of a regulated CRS, as such actions also represent a signalling factor to domestic, regional, and international credit providers in a tight post-COVID-19 credit market.