TZ bankers hail proposed credit information system

Tanzanian bankers have hailed the decision to set up credit reference bureau by the country’s central bank, Bank of Tanzania (BOT), in a bid to check the loan repayment defaulting rate and reduce interest rate of loans, Xinhua learnt here on Thursday.Lawrence Mafuru, chairman of Tanzania Bankers Association (TBA) and managing director of National Bank of Commerce (NBC), blamed the lack of information of borrowers for the massive loan repayment defaulting in many banks. He said the high default risk is in turn forcing banks to keep lending rate high, which stands between 14 and 24 percent. “It is not that we are pegging the rates at those levels deliberately. Rather the default risk is extremely high,” he said.The credit information system, which is to be set up in September this year, is to improve, among other benefits, the financial sector’s performance and stimulating economic development by addressing the impediments contributing to the increasing number of non-performing loans.On the other hand, borrowers may take advantage of their positive credit history as collateral to access loans at better rates and seek more competitive terms from different lending institutions.BOT deputy governor, Lila Mkila revealed recently that a pilot testing is expected to begin in June and the databank will kick off in September this year as hardware and preliminary software had been supplied and installed.