July 2010

If you are issuing a Letter of Credit, (or authorizing an overdraft) for a customer, the customer needs a financial card

• There is a common misperception that only a borrower needs a financial card. For compliance purposes with data submission requirements in the Data Standardization Manual (setting out what data must be reported to the credit bureau) issued by the Bank of Uganda, all customers with any credit facility must obtain a financial card
• Information relating to all facilities, whether held by a legal entity (Company) or by a person, must be reported to the credit bureau with an accompanying financial number.
• The customer with the Letter of Credit (LC) or overdraft is treated as a borrower for purposes of issuing the financial card

The financial card system developed for the CRB in Uganda to overcome the problem of no national identity is also being used to identify companies and authorised agents representing those companies

• A FCS number is uniquely created for the company based on the supply of several combination data items
• Individuals representing that Company are issued with their own biometric cards in the company’s name
• One person can represent more than one company, and would carry two or more Company Agent cards if this is the case
• On the credit bureau, by performing an FCS lookup for the individual, all linked associations to all companies are shown
• On the credit bureau, by performing an FCS lookup for the Company, all authorized agents are shown
• Further credit searches into the associated links are encouraged as good risk in one company does not mean good risk in all associated companies. Your loan could be being used in another business for another purpose altogether.

Compuscan requires that every enquiry performed to the bureau must be accompanied by an indication that the customer has consented to his or her credit information being

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  • Reported to the bureau
  • Viewed at the bureau by any authorized user for permitted purposes

• The process to obtain consent should form part of your loan offer documentation, or it could be signed as part of the loan application form

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  • If there is no consent being obtained in your loan process you should immediately notify the appointed CRB project Manager of your institution and ensure that the borrower’s rights are upheld

• A borrower has the right to refuse to give consent to have his or her data viewed by others, but that data must still be reported to Compuscan for central bank supervision reporting purposes

We collect Positive and Negative information related to how ALL regulated financial sector borrowers (NEW and EXISTING) repay their debt obligations every month.

• Negative information is the state when a borrower falls into any form of arrears on the account. All “bad” data from this state is collected and shown on the bureau
• Positive information is related to any “good” historical information about how the debt is repaid
• Both sets of data are collected to show a full picture of how all debtors with any exposures repay their debt obligations.

The Financial Institutions Act and the Micro Finance Deposit Taking Institutions Act in Uganda make it a requirement for institutions to report any form of financial malpractice (fraud) to the credit bureau.

• Issuing a cheque with insufficient funds to cover the obligations is considered as a fraudulent activity
• All institutions in Uganda that have cheque products are required to report any returned cheques with the date, amount and reason to the credit bureau.
• A borrower can have a number of “good” loan accounts but underwriters and assessors of credit decisions must also look to see if any cheques are being returned as this could paint a different picture of the applicant.