Credit reference bureau Metropol’s Ugandan arm is set to launch a service for borrowers to check their credit ratings via mobile phones.
Borrowers in Uganda are entitled to one free credit report per year and the company said that it will soon begin providing this information through text messages. These credit reports profile borrowers and their abilities to pay back debt.
“This shall include the current repayment status of existing credit facilities, any defaults in the recent past, or any long-standing challenges with previous loans,” said Metropol.
Customers subscribing for the mobile-based credit reports, Metropol said, will be charged a one-off fee.
Metropol is one of two credit reference bureaus in Uganda, the other being Compuscan, a company that is partly-owned by private equity firm Actis.
The company was licensed to begin operations in 2015 after Uganda amended its regulations to allow the entry of loan information-sharing companies.
Metropol was established in Kenya in 1996. Apart from banks, the company also draws the data that informs its credit reports from mobile phone companies and the Higher Education Loans Board (HELB).
The rate of loan defaults in East Africa is high and information on borrowers history is used by banks to make decisions on lending.