mechanism where lenders’ and credit
providers share information about their
customers.
Before credit reference bureau were
introduced if you were a customer of say
KCB and you had a loan with KCB and
you went to Barclays bank to ask for a
loan you would fill a form at Barclays and
Barclays would ask you whether you have
any other loans anywhere else. And you
tell them yes you have a loan with KCB.
What Barclays bank would then do is to
write an opinion request to KCB and say
so and so has applied for a loan here can
you please tell us how they are performing
on that loan. If you are a good customer of
KCB they would say this guy is not very
good to discourage Barclays so that their
good account does not move.
But if you were a bad customer they would
confirm that they know you very well and
we consider you as a good customer of
KCB so that Barclays can buy the account
which is a bad account. Although that was
a form of exchanging information, it was
not an objective one at all.
So what has happened is that Credit
Reference Bureaus have been established
as a means through which banks exchange
information on their customers so in the
current circumstances what happens is
that instead of KCB communicating with
Barclays for information on a customer,
that information is av