Credit expert counsels on non-performing loans

April 30, 2013 - Guardian

Local commercial banks have been urged to reduce the rate of high ratio of non performing loans on their books which have been reducing profits hence affect their operation and economy as a whole .

According to the General Manager of Bradstreet Credit Bureau Tanzania, Adebowale Atobatele, for long, banks and financial institutions in the country have had to struggle with highs ratios of non-performing loans on their books. 

The bureau was issued first licence to operate in the country by the Bank of Tanzania late last year is also organizing a workshop with commercial banks early next month. He said most of non performing loans have had to make provision for thus recording lower operational profits. 

However, with the introduction of the credit bureau system banks, financial institutions and consumers can look to brighter days ahead. 

Explaining about the planned workshop to be held on 3rd May this year, Atobatele said, it is simply an opportunity for them to meet with, and listen to their partners in Tanzania.

"We consider the banks and financial institutions in Tanzania to be our partners, he exist to serve them and it is important for us to understanding the specific challenges that they encounter in their business of creating risk assets".

He said they believe that the contributions from the banks and financial institutions will help them develop a solution that is in the best interest of Tanzanian Banks, financial sector, economy and Tanzanians as whole; and that also meets globally recognized best credit reporting standards.

" The workshop which is a precursor to the official opening of Dun and Bradstreet Credit Bureau's offices in Tanzania is aimed breaking the ice between the credit bureau and the banks and financial institutions many of whom have played a key role in ensuring that Tanzania gets a bureau that is respected globally.

For his part, the company's Chief Executive Officer. Miguel Llenas said their aim is to build the most comprehensive Credit Bureau that will play a role in boosting Tanzania's economy and financial soundness.To this end, the workshop is designed to be very detailed and will focus specifically on how we intend to help banks and financial institutions in Tanzania improve the assessment of credit/loan applicants with a view to ensuring that they make only the most informed business decision that reduces their NPL ratio and creates an easily identifiable pool of credit-worthy customers.

The next workshop follows the successful commencement of operations at its Ghana Bureau where already the market is abuzz with D&B's presence.

Financial experts say presence of Bureau in Tanzania meets the much anticipated boost to the financial stability and strengthening efforts of the Bank of Tanzania and will bridge the information asymmetry in the banking sector.