Metropol Corporation, a Kenyan-owned firm, has been licensed by the Bank of Uganda to operate a credit reference bureau after a two-year wait for approval.
The credit reference bureau which plans to start operations by the end of June this year will operate as Metropol Uganda Limited.
The company applied for the license following the liberalization of credit information sharing services in Uganda. South African firm, Compuscan, had in 2008 been given exclusive rights to operate credit reference bureau until 2012 when the monopoly agreement was cancelled.
“We applied for a license to start doing business in Uganda two years ago, and we are pleased to announce by mid this year we will be offering credit reports and holistic rating of SMEs in the pearl of Africa,” Sam Omukoko, the Metropol Chief Executive Officer said.
Omukoko said the entry into Uganda reaffirms the growing need for sharing of credit information in the region, a practice that is still in infancy stages in Africa.
Only South Africa, Algeria and Nigeria have fully functional CRBs (Credit Reference Bureau) and Kenya growing the culture fast since the opening up of the service four years ago.
The Ugandan subsidiary consolidates Metropol’s regional positioning plans since it is already operating in Tanzania, and Rwanda, as well as further south in Zimbabwe.
“Uganda started with one company giving it five years of exclusive operations. But, as the critical role of credit reference bureaus crystallize the country is opening its spheres,” Omukoko said.
Credit referencing is taking root in the region with lenders making it a mandatory requirement during loan appraisal. The bureaus compile clients’ credit histories drawn from banks, Saccos, Microfinance institutions, Utilities providers, among other licensed service providers.
“Credit referencing aggregate financial information about companies (corporate and SMEs) as well as individuals, providing lenders with a scientific tool to access credit worthiness of borrowers, aiding risks mitigation,” Omukoko said.