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Regulatory and Business Issues at Play in the East and Sub-Saharan Africa Region

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  • 1. Regulatory and Business Issues at Play in the Eastand Sub-Saharan Africa RegionFrank LenisaMarketing DirectorCompuscan23 October 2012
  • 2. Least Developed Credit Bureaus in the World Penetration rate of private bureaus (% of adults) Doing Business, 2012Frank LenisaOctober 23, 2012 Page 2
  • 3. Low Number of Credit Accounts Country Population (million) No of credit accounts (estimated) Mozambique 15 120 000 Angola 20 200 000 Tanzania 46 1300 000 IFC, 2008Frank LenisaOctober 23, 2012 Page 3
  • 4. Credit Reporting is Developing Doing Business 5 year overview Country Depth of credit Getting credit rank information index (0-6) Kenya Remained at 4 From 13 - 8 Tanzania Remained at 0 From 115 - 98 Zambia From 0 - 5 From 97 - 8 Ghana From 0 - 3 From 115 - 48 Uganda From 0 - 4 From 158 - 48 Rwanda From 2 - 6 From 158 - 8 Doing Business, 2008 - 2012Frank LenisaOctober 23, 2012 Page 4
  • 5. Regulatory and Business Issues  Regulatory framework  Economic viability of credit bureaus  Lack of data and unreliable data  Information technology  Skills and knowledgeFrank LenisaOctober 23, 2012 Page 5
  • 6. Regulatory Framework  Bank secrecy provisions limit participation of credit bureaus  Credit market is not competitive; banks have no incentive to share information  Reforms needed to mandate information sharing  Bureau supervision agencies constrains the use of alternate credit dataFrank LenisaOctober 23, 2012 Page 6
  • 7. Economic Viability of Credit Bureaus  Small sized credit markets  Difficulty to achieve economies of scale to lower operating costs  Operating costs are high in the region  Profitability can take many yearsFrank LenisaOctober 23, 2012 Page 7
  • 8. Lack of Data and Unreliable Data  Lack of location identifiers  Interchangeable, unreliable individual naming  Lack of unique identifiers  Poor credit granting practices  Manual based processesFrank LenisaOctober 23, 2012 Page 8
  • 9. Information Technology  Data extraction from banking platforms affects data quality  Lack of information technology investment and management especially by MFIs  Electricity supply constraints and expensive  Problematic telecommunications and expensive  Problematic hardware supply, support and expensiveFrank LenisaOctober 23, 2012 Page 9
  • 10. Skills and Knowledge  Poor practical application of knowledge  High number of job applicants  Language barriers  Lack in understanding of general credit reporting principles  Stakeholders lack collaborationFrank LenisaOctober 23, 2012 Page 10
  • 11. Possible Solutions  Biometric and smart card technologies  Hub and spoke approach  Broad consultation and thorough research  Phased approach to bureau implementation  Training for all stakeholdersFrank LenisaOctober 23, 2012 Page 11
  • 12. About Compuscan  Established in 1994  Headquarters in Cape Town  Full service credit bureau  Wide range of value adding products and services  Representation in 5 countries in regionFrank LenisaOctober 23, 2012 Page 12
  • 13. Thank you for your time Any questions? Frank Lenisa +2782 920 0455 frank@compuscan.co.za www.compuscan.co.za Find us on:Frank LenisaOctober 23, 2012 Page 13