Minister Hassan calls on banks to step up and fulfil their role of lender |26 October 2023
Minister Hassan
The Minister for Finance, National Planning and Trade, Naadir Hassan, has called on banks to step up and fulfil their role of lender.
Minister Hassan made the call in the National Assembly during the debate on the Credit Reporting Bill, on Tuesday, October 23, 2023.
He explained that the new Bill makes provision for an improved and comprehensive Credit Information System (CIS), which will contain not only credit information of clients, but also their historical record of credit repayments.
“Banks should view this new improved system as a positive development, as it will allow them access to all required information to make an informed decision prior to give out a loan. They will have access to all information needed to improve access to credit.”
The key new aspect of the system will be the availability of the historical credit record of clients, not only from financial institutions, but from others, such as telecommunications companies and the Public Utilities Corporation.
Equipped with the new improved CIS, Minister Hassan has appealed on banks to be more “flexible” and “modernise their internal credit process”.
“I call on banks to modernise their credit vetting process. The current process is unacceptable as banks are still risk adverse, requesting too many documents, which in my opinion are unnecessary.”
He has noted that while modernisation is taking place in the sector, the old ways and approach are still being adopted by financial institutions when it comes to clients accessing credit.
“We are implementing a modern system (CIS) which will allow banks to have access to practically all credit records of clients, and thus I am appealing to them to also modernise their credit process and move with the time. Financial institutions will have to raise their game in view of the critical role they play in the acceleration and growth of the country’s economy.”
The Credit Reporting Bill was approved by the National Assembly.