TANZANIA: CREDIT REFERENCE BUREAUS ARE HIGHLY WELCOME

THE establishment of the much-awaited Credit Reference Bureau (CRB) the cost of borrowing from banks and other financial institutions is expected to go down significantly.

It is a move envisaged to reduce the cost of doing business in the country and ultimately make Tanzania a better place to live for many including the man on the street.

CRB, according to experts, is the database for consumer credit information that provides details on the behaviour of an individual or corporate body in repayment of loans to banks and other lenders. Banks and financial institutions in the country have long been complaining that Tanzanians are notorious in defaulting loans repayment.

This, according to the bankers, is among the factors that force them to fix high interest rates on lending, much to the chagrin of borrowers, especially those in the low-income bracket.

People in the low-income bracket, who include salaried employees and nascent entrepreneurs, have for long regarded banks to be rude, unfriendly and predatory in behaviour.

Many still believe that borrowing is an easy road for one to turn into a destitute, forced to pay through his nose or made to sacrifice a pound of his or her own flesh.

However, following a series of reforms in the financial sector over the last two decades, the country is now witnessing stiff competition among bankers and other providers of financial services.

Some 30 years ago banking and insurance was a monopoly of two or three state-owned institutions, but today there are more than 50 banks and hundreds of insurance services providers all struggling for a slice in the market share.

It is therefore hoped that the establishment of CRD is going to propel availability of credit as opposed to being an obstacle in processing of loans.

The CRB must always act swiftly in provision of information to bankers and other lenders locally and abroad in accordance with the law of the land.