| BoT HQ in Dar |
The Bank of Tanzania (BoT) has licensed another credit reference bureau bringing hope to lenders that they will do away with defaulters.
Creditinfo Tanzania Limited which commences operations today becomes the second credit information provider since the credit reference system was launched in Tanzania last year.
“The licence allows the bureau to carry out credit reference business in Tanzania. The bureau’s head office is located in Barclay’s House, Ohio Street in Dar es Salaam,” says the central bank in its public notice published on its website on Monday.
Dun & Bradstreet, a global business information firm, was licensed last September as the first credit reference bureau. Commercial banks and other lending institutions in Tanzania suffer from high credit risk exposure partly due to a lack of sufficient information about borrowers.
The lack of credit information results in high lending and default rates for loans, as lenders cannot establish which borrowers are creditworthy and which are likely to default on loans.
Creditinfo Tanzania Limited which commences operations today becomes the second credit information provider since the credit reference system was launched in Tanzania last year.
“The licence allows the bureau to carry out credit reference business in Tanzania. The bureau’s head office is located in Barclay’s House, Ohio Street in Dar es Salaam,” says the central bank in its public notice published on its website on Monday.
Dun & Bradstreet, a global business information firm, was licensed last September as the first credit reference bureau. Commercial banks and other lending institutions in Tanzania suffer from high credit risk exposure partly due to a lack of sufficient information about borrowers.
The lack of credit information results in high lending and default rates for loans, as lenders cannot establish which borrowers are creditworthy and which are likely to default on loans.
This puts small and start-up businesses at an immediate disadvantage as large business may find their creditworthiness easier to prove. For instance, some banks provide loans only to businesses that have been established for a number of years.
It is hoped that more information for lenders will reduce loan defaults, lower interest rates and increase access to credit.
One of the major problems of doing business in Tanzania is thought to be the difficulty in accessing credit.
Source: The Citizen, reported by Alawi Masare in Dar es Salaam
One of the major problems of doing business in Tanzania is thought to be the difficulty in accessing credit.
Source: The Citizen, reported by Alawi Masare in Dar es Salaam
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