Credit reference bureau, Metropol, has been licensed to operate in Uganda giving it presence in all East African Community countries, excluding Burundi.
The Kenyan-owned bureau said it would start the Ugandan operations by end of June following approvals given after a two-year wait.
Uganda had previously given exclusive rights to South African Compuscan until 2012 when the monopoly agreement was cancelled.
“We have been licensed as a credit reference bureau in Uganda following liberalisation of credit information sharing in the country,” said the Metropol’s chief executive Sam Omukoko. The company also operates in Zimbabwe.
Compuscan had been allowed to operate in Uganda exclusively since 2008 with 31 institutions submitting information to the bureau.
A total of 568,501 credit enquiries on borrowers were made on the credit reference bureau (CRB) during 2013 raising the cumulative number of enquiries to 1,723,191 at the end of the year.
Credit referencing is taking root in the region with lenders making it a mandatory requirement during loan appraisal. There are two licensed bureaus in the country- Metropol and America’s Transunion.
Stephen Kamau, business development manager at Transunion, said the firm was yet to apply for a licence in Uganda but it was interested in the market.
Transunion also operates in Rwanda, Botswana, Swaziland, Namibia, Malawi, Zambia and South Africa.
Kenya started credit referencing in 2010 with listing of bad borrowers only. Last year, banks also started sharing information on good borrowers.
The sharing of borrowers data is meant to lock out serial defaulters from the borrowing system while rewarding good borrowers. The Central Bank of Kenya said 4,779,273 credit reports had been requested by banks since credit referencing was launched underlining its growing relevance.
The number of reports requested by individuals are lower at 77,422.
Metropol has started a mobile phone-based service, dubbed Crystobol, to offer individuals access to their credit reports. The system, set to be officially launched this week, attracted about 15,000 users during its pilot stage.
The bureaus were last year allowed to contract agents in order to increase public access.
“We have about 50 agents but we want to bring that to 3,000 by end of the year,” said Mr Omukoko who attributed the initial slow uptake to stringent central bank requirements on the process of recruiting and managing the agents.
Metropol has hired Ndiritu Muriithi, former MP for Laikipia West and assistant minister for Industrialisation, as the chief economist.
The firm is riding on Mr Muriithi’s experience at International Finance Corporation, the World Bank’s investment arm, as it seeks to expand its product offering. Mr Muriithi worked at the IFC for eight years before joining politics.