Credit bureau to cut banks’ risk levels
Dec 02, 2008
BANKS are to drastically reduce risky private lending when the long-awaited Credit Reference Bureau (CRB) is officially launched today.
By Sylvia Juuko
BANKS are to drastically reduce risky private lending when the long-awaited Credit Reference Bureau (CRB) is officially launched today.
CompuScan CRB Ltd was contracted by the Bank (BOU) of Uganda to implement the CRB and the Financial Card System (FCS).
Tumusiime Mutebile, the central bank governor, is optimistic that the benefits would include improved credit assessment and the shortening of the loan approval time. “Borrowers stand to benefit as the CRB and FCS take root in Uganda.
“Getting loans will be quicker due to timely access of your loan records and loan providers will not need so many documents from you every time you request for a loan,†noted Mutebile.
The governor pointed out that borrowers with good loan records would not be required to provide securities, like land titles, to get a loan.
“You will also be guided on getting a loan that you are able to repay,†he added. “With time, as borrowers build good reputations, they will be able to obtain better loan terms from participating institutions, such as lower interest rates,†he predicted.
While non-performing loans have reduced to about 3% of the total assets in the financial system, interest rates are still high due to the risk of borrowers defaulting on loans.
Data from the central bank shows that lending rates on loans are hovering between 21% and 28% per annum.
BOU and CompuScan have ensured that information on all borrowers is kept safe, secure and confidential.
CompuScan uses internationally-recognised security protocols, including firewalls and intrusion detection, to protect the system from illegal access.
The German Technical Cooperation, Swedish International Development Agency, German Development Bank, World Bank and Private Sector Foundation have supported the introduction of the CRB and FCS.
BANKS are to drastically reduce risky private lending when the long-awaited Credit Reference Bureau (CRB) is officially launched today.
CompuScan CRB Ltd was contracted by the Bank (BOU) of Uganda to implement the CRB and the Financial Card System (FCS).
Tumusiime Mutebile, the central bank governor, is optimistic that the benefits would include improved credit assessment and the shortening of the loan approval time. “Borrowers stand to benefit as the CRB and FCS take root in Uganda.
“Getting loans will be quicker due to timely access of your loan records and loan providers will not need so many documents from you every time you request for a loan,†noted Mutebile.
The governor pointed out that borrowers with good loan records would not be required to provide securities, like land titles, to get a loan.
“You will also be guided on getting a loan that you are able to repay,†he added. “With time, as borrowers build good reputations, they will be able to obtain better loan terms from participating institutions, such as lower interest rates,†he predicted.
While non-performing loans have reduced to about 3% of the total assets in the financial system, interest rates are still high due to the risk of borrowers defaulting on loans.
Data from the central bank shows that lending rates on loans are hovering between 21% and 28% per annum.
BOU and CompuScan have ensured that information on all borrowers is kept safe, secure and confidential.
CompuScan uses internationally-recognised security protocols, including firewalls and intrusion detection, to protect the system from illegal access.
The German Technical Cooperation, Swedish International Development Agency, German Development Bank, World Bank and Private Sector Foundation have supported the introduction of the CRB and FCS.