July 2010

In Uganda all financial institutions are pulling out all the stops in an effort to “clean up data” being supplied to the credit bureau as more and more financial institutions are using the data on the credit bureau as a part of their everyday loan decisions. Some institutions have even brought in temporary staff to go that extra mile to ensure older information is updated.

The issuing of the financial card (seen as the first phase of the credit bureau project) has now become a part of ordinary business in loan granting in Uganda so much so that an increase of 50,000 cards issued are no longer seen as exciting by those that follow the growth of the project. In Compuscan’s world every card is still relevant as each card issued means a new record that can be added to the credit bureau and properly linked.

In parallel to institutions issuing cards, Compuscan have been working with the participating institutions to receive data for loading to the credit bureau to build the files that eventually make up the credit report. In this regard the quality of the information takes priority before data is loaded. Compuscan runs comprehensive data quality tests to determine which records are suitable for loading to the bureau and if any records are not suitable these are rejected and are returned to the institution to rectify. Naturally if the data is loaded and decisions are taken with reference to the credit information, incorrect perceptions about the credit quality of the borrower can be formed and unfair decisions can be made.

Across the board all people who come in contact with any data relating to any borrower have a responsibility to ensure that data is accurate and well maintained.

The Application Information

The loan application process begins with gathering information when a borrower applies for a loan. The first step in the loan process is to gather information about the client. Collecting accurate and thorough information from the client during the application process is both easy and critical. This is the first point of creating any information about the borrower possibly on the credit bureau and all efforts should be made to ensure that whatever is captured to internal systems is done so carefully. Remember that more is always better.

Maintaining Client and Loan Information

Maintaining customer information so that it is up to date and easy to find is also extremely important.

Once client information has been gathered, the credit check has been done, and the loan has been disbursed, then client and loan information needs to be maintained. In other words it needs to be stored somewhere and it needs to be kept accurately up to date. If there are changes to client or loan information these need to be recorded.

Institutions need to ensure effective policies and procedures for maintaining information are in place so that monthly data submissions that report the ongoing loan performance of the borrower can be accurately supplied to the bureau.