With the Credit Reference Bureau (CRB) set to start operations in Rwanda, the Bankers Association has called upon commercial banks to provide credit information related to their clients.
“Banks are obligated to provide information on all current borrowers and also on those who have, in the past seven years, had any type of credit facility from any bank,” a statement from the Bankers Association reads in part.
The Association says that the Bureau will maintain and provide lenders with background information on all people seeking financial credit in Rwanda.
It will also provide information to lenders as part of evaluation of the client’s loan requests.
It is expected that the availibility of this information will assist in improving borower access to credit and also help banks to effectively manage default risk.
According to the statement, where a good track record is established over time, there will be a pricing benefit to those who have demonstrated integrity in their repayment history.
The Chairman of Bankers’ Association, Steve Caley, said that lenders will only provide borrowers information to the CRB upon their consent.
The statement said that refusal will itself be reported to the CRB as instructed by the National Bank of Rwanda (BNR).
“A secret file with basic information will be kept with the bureau. Only owners will have access to their files,” Caley assured.
Lenders will also provide monthly updates on credit behaiviour indicating particular borrowers’ repayment record and amount borrowed.
According to Caley, information about clients who delay to repay deafult will be directly sent to the Bureau.
Positive or good borrowers will have a special pricing on interest rates while bad borrowers will face difficulty in accessing credit or get high interest rates.