Defaulters’ days numbered after credit reference bureau launched

Dar es Salaam. The first licensed credit reference bureau, Dun and Bradstreet (D&B) Bureau Tanzania Limited, was launched on Friday, promising to boost financial stability and strengthen efforts of the banking sector.

Credit reference bureaus offer financial institutions better protection against loan defaulters by providing them with credit information about borrowers.

Financial institutions then aquire a better position to offer distinguished lending interest rates depending on the risk their respective borrowers have following the credit information..

Speaking during the D&B consultative workshop held in the city on Friday, the bureau’s general manager Adebowale Atobatele said lenders should expect “the most comprehensive credit bureau” once it commences operations in the next few weeks.”Banks and financial institutions can expect to make accurate risk predictions, prevent loss, reduce Non Performing Loans ratio and increase their ability to lend to a broader risk segment,” he said The D&B chief executive Mr Miguel Llenas said the aim is to build comprehensive Credit Bureau that will play a vital role in boosting Tanzania’s economy and financial soundness. According to him, the launch aimed at developing working relationship between credit bureaus, banks and financial institutions, many of which played a key role in ensuring that Tanzania gets world class bureaus.

“Through this workshop we have focused specifically on D&B’s role to help banks and financial institutions in Tanzania to improve the assessment of credit/loan applications with a view to ensuring they make only the most informed business decisions that reduce NPL ratios so as to create an easily identifiable pool of credit-worthy customers,” said Mr Llenas.

Credit bureaus, established by D&B, have reduced the information asymmetry between lenders and borrowers, thereby creating transparent and efficient credit information systems.