Credit reference bureau targets 500,000 clients

Mar 01, 2009

THE credit reference bureau is to issue over 500,000 special cards with borrowers biometric information by the end of this year, a senior official has said.

By Sylvia Juuko

THE credit reference bureau is to issue over 500,000 special cards with borrowers biometric information by the end of this year, a senior official has said.

Mike Malan, the Compuscan credit reference bureau managing director, said 10% of commercial bank branches had been selected for a pilot phase to roll out the financial card system.

“We already issued 500 cards, but we expect to issue between 500,000 to 550,000 financial cards by the end of this year,” Malan said.

The privately-run bureau, which was licensed by the central bank, was launched by the governor, Tumusiime Mutebile, in December last year.

It will be a point of reference for banks and credit institutions. “We have already covered two weeks of the pilot period, which will run for a month.

“We have produced 700 cards and the number is growing everyday,” Malan said.

The bureau, he said, had already collected three million records since November 2007.

“We wanted to ensure that operations in the branch are not congested to give customers a good experience in enrolling onto the financial card system,” he told reporters in Kampala last week.

He said there were 600,000 active borrowers’ accounts in the market.

Banks were required to report these borrowers’ accounts monthly, he said.

The bureau will reduce lenders’ risks, which will eventually reduce lending rates.

“The banks will use credit history to determine the future risk. Likewise, the borrowers will be able to negotiate for favourable interest rates.”

“If I repay my loans according to schedule and develop my own reputational collateral, it becomes an opportunity for me to negotiate a better rate,” Malan said.

“Banks will start competing for the good customers.”

Anthony Opio, the central bank’s director for non-bank financial institutions, said 35 branches of all the participating banks and credit institutions had started running the system and issuing financial cards.

He said Compuscan would offer its services at over 434 branches of the participating banks and credit institutions.

The bureau is expected to reduce the rate of bad loans.

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