Tanzania licences first credit reference bureau

Reuters
September 29th, 2012

Reuters – Tanzania’s central bank has licensed the country’s first credit reference bureau to encourage information sharing among banks to spur lending and lower commercial interest rates, it said on Friday.

Dun & Bradstreet, a global business information firm, was licensed as the credit reference bureau.

“Access to individual or company’s credit history reduces incidences of institutions lending to habitual defaulters,” said Juma Reli, deputy governor at the central bank.

Banks in Tanzania suffer from high credit risk exposure partly due to a lack of sufficient information about borrowers, analysts said.

“The retail lending rates are very high in Tanzania, with commercial banks charging rates of up to 22 percent,” said Moremi Marwa, CEO of Tanzania Securities Limited.

“In the previous quarter, some major commercial banks had over 10 percent non-performing loans, which is quite a high rate.”

Credit to the private sector grew at an annual rate of 19.7 percent in the year to July 2012, compared with 25.3 percent recorded a year ago, the central bank said on its website.