Two credit reference bureaus licensed by BOT

LOAN borrowers from various financial and credit institutions in the country will now have their credit information database monitored from the Credit Reference System (CRS) which was established by the Bank of Tanzania (BOT) in September this year by two credit reference bureaus which have been recently licensed by the bank, it has been learnt. The BOT’s Director of Banking Supervision Agapiti Kobelo has named the companies as Dun & Brandstreet Credit Bureau Tanzania Limited and Creditnfo Tanzania whose task he said would be to provide customer’s credit reporting services as they would be recorded in the system by the financial institutions. The BOT boss told attendants in a one day stakeholders’ workshop on credit information sharing held yesterday in Dar es Salaam, the workshop was organized by Tanzania Consumer Advocacy Society (TCAS) in collaboration with the Consumers’ International and it discussed consumer educational awareness. He said BOT has licensed these companies in order to ensure fruitful operations of the credit reference system in Tanzania and thereby the BOT will effectively supervise the operations of the reference databank to ensure that the information collected is managed securely and responsibly at all times and in accordance with provisions of the law and regulations. “Through the system, the borrowers’ information would now be easily acquired by other banks from the companies if needed to see if they might have other loans taken from other financial institutions or not” clarified another BOT official Abubakar Ukhotya. However, he noted that, students who take education loan will also be easily traced through to their employers. The CRS system of the BOT is designed to collect and provide information on the payment record of all clients of the lending banks and other financial institutions as well as those of Savings and Credit schemes in the United Republic of Tanzania and other entities engaged regularly in the extension of credit facilities. During the workshop some stakeholders of the invited financial institutions expressed their concern on the awareness of the system saying that, bank customers need to be educated on the importance of the system before going to an institution to seek for loans. Contributing over the topic on customers’ awareness, TCAS Executive Director Benard Kihiyo noted that, while the benefits of a sound credit information sharing system are evident, it is critical to educate borrowers (consumers) on how to use their credit reports and manage their level of debt. He also insisted on consumer education noting that it is an important part of the process of awareness and understanding of the loan borrowers. However, he said this is a basic consumer right that must be insisted to the general public for the comprehensive records. He said financial education is therefore an important pillar which complement the work being done in enhancing credit information sharing, and added that, consumer awareness program on information is important also. Contributing his views, another stakeholder Onica Makwakwa of Consumer International noted that, “Customers’ Information was an important aspect to be known by loan givers so that once they get such information would help them know exactly how to go about to see their background status of borrowing money from other institutions. The workshop brought stakeholders from BOT, CSOs, MFIs, Banks, CRBs, SACCOS, VICOBA and TAMFI.