The National Bank of Rwanda (BNR) has started a month-long campaign to encourage the public to make use of credit reference services as one way of making access to commercial loans faster and cheaper.

The 'Step Forward: I have a clean record. Do you? 'campaign is aimed at promoting a culture of good loan repayment that in turn will make access to credit easier and loans cheaper to those will a clean repayment record.

BNR vice-governor, Monique Nsanzabaganwa told a media briefing on March 1 that when calculating interest rates on loans, lenders factor in the risk of default by a particular borrower.

This means that the absence of credit information about a borrower makes it difficult for banks to make a proper risk assessment of a particular person or business seeking a loan.

With no information to rely on, banks often assume the risk to be high and this has a direct influence on whether to grant the loan request and at what rate. "...some borrowers have [a]poor credit history while others may not have any history at all. The credit reference services provide an opportunity to bridge this information gap by providing accurate and timely information on borrowers," she said.

One company, CRB Africa is so far providing credit reference bureau services in Rwanda since the enabling law was enacted in 2010. Under the law, all commercial banks, micro-finance institutions and insurance companies are compulsory participants. Utilities and telecom companies that also offer services on credit can participate on voluntary basis.

Already, over 230 Umurenge SACCOs are reporting to the credit reference bureau, a development that has pushed credit information coverage to about 12.7% of the Rwanda adult population as of December 1212.

During the awareness campaign, the public will hear that credit reference bureaus will enable a faster and easier borrowing process, ensure good borrowers benefit from their reputation of being less risky.