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- May 10, 2012
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Tanzania is set to launch a credit bureau databank in four years through World Bank-sponsored funding.
The databank will allow banks to share their clients information, enabling small firms and individuals with a good credit history access easy loans.
Small firms and individuals borrow at high rates because of the higher risks involved, as lenders do not have information on their credit history.
With Tanzanias central bank licensing the countrys first credit reference bureau, Dun & Bradstreet, a global business information firm, by the end of September, the World Bank hopes small businesses will have easier access to funding from commercial banks.
Access to finance
The World Bank helped the Bank of Tanzania launch the countrys first credit reference databank to make it easier and faster for smaller businesses to gain access to financing, said Moyo Ndonde, the World Banks sub-Saharan Africa Credit Bureau programme operation officer.
Ms Ndonde said a credit bureau databank, with clients information collected from all regulated financial institutions, should be licensed in four years time. The information will be made available to licensed private credit bureau.
A single databank known as a Credit Reference System (CRS) should be in place in 11 African countries by 2016.
The CRS will monitor and store information about borrowers, which can then be used by lenders to conduct due diligence for any new loan applicant before issuing credit.
The CRS system is designed to collect and provide information on payment records of all borrowers, such as those from savings and credit schemes engaged in regular issuance of loans.
The director of banking supervision at the central bank, Agapiti Kobelo, said the CSR will also source data from utility providers, phone companies, debt collection agencies, public institutions such as the Business Registration and Licensing Authority (Brela) and the courts.
Mr Kobelo explained that the bureau will prepare credit reports that will be sold on request to users.
However, problems related to data accuracy are the subject of numerous complaints and litigations around the world and as a result have had significant impact on the development of credit reference systems
The databank will allow banks to share their clients information, enabling small firms and individuals with a good credit history access easy loans.
Small firms and individuals borrow at high rates because of the higher risks involved, as lenders do not have information on their credit history.
With Tanzanias central bank licensing the countrys first credit reference bureau, Dun & Bradstreet, a global business information firm, by the end of September, the World Bank hopes small businesses will have easier access to funding from commercial banks.
Access to finance
The World Bank helped the Bank of Tanzania launch the countrys first credit reference databank to make it easier and faster for smaller businesses to gain access to financing, said Moyo Ndonde, the World Banks sub-Saharan Africa Credit Bureau programme operation officer.
Ms Ndonde said a credit bureau databank, with clients information collected from all regulated financial institutions, should be licensed in four years time. The information will be made available to licensed private credit bureau.
A single databank known as a Credit Reference System (CRS) should be in place in 11 African countries by 2016.
The CRS will monitor and store information about borrowers, which can then be used by lenders to conduct due diligence for any new loan applicant before issuing credit.
The CRS system is designed to collect and provide information on payment records of all borrowers, such as those from savings and credit schemes engaged in regular issuance of loans.
The director of banking supervision at the central bank, Agapiti Kobelo, said the CSR will also source data from utility providers, phone companies, debt collection agencies, public institutions such as the Business Registration and Licensing Authority (Brela) and the courts.
Mr Kobelo explained that the bureau will prepare credit reports that will be sold on request to users.
However, problems related to data accuracy are the subject of numerous complaints and litigations around the world and as a result have had significant impact on the development of credit reference systems
