The perception that blacklisting deny consumers access to credit is outdated: Burger – Windhoek Observer

Martin Endjala

Despite ongoing progress in the usage of consumer credit information in Namibia, there is still a perception that blacklisting is used to deny consumers access to credit, this is an outdated concept and an inaccurate term.

This is according to TransUnion Namibia Chief Executive Officer Lara Burger, while responding to Windhoek Observer questions on the status quos of blacklisted Namibians who may have defaulted on their payments to financial institutions and others.

Burger said in modern credit economies around the world, a consumer’s credit score and credit report are essential financial tools that help people get access to financial products and services such as loans so to enable them to start small businesses, buy a home, purchase a car to help get them to work, or just make essential day-to-day purchases.

“One of the many ways lenders assess the risk of a loan is by referring to a consumer’s credit score (a three-digit number calculated from their credit history held on their credit report that is provided by a credit bureau or their credit report itself.

“A credit report reflects a consumer’s payment behaviour over time, using a range of data, including payment history, credit utilisation and the number of credit enquiries requested from sources such as banks, microfinance institutions, other credit providers, and traders. You can think of your credit profile as a snapshot of your credit health.

“It is based on your credit history and how you have conducted your financial affairs. A healthy credit history is built by consistently practicing good credit habits. Making payments on time and keeping your balances low shows lenders you are adept at managing debt.

Equally, late or missed payments can affect your credit profile but adopting good credit practices can always be improved,” she explained.

She said that it can enable Namibians to get access to credit products they might not otherwise be considered for and can lead to preferential interest rates, product features and conditions.

In Namibia and across the African continent, Burger reiterated that TransUnion works tirelessly to ensure even more consumers can be credit assessed, enabling them to be able to access credit, adding that this is a core pillar of its financial inclusion activity.

she asserted that TransUnion Namibia is constantly striving to add new data assets to the credit bureau to help even more consumers be visible to lending institutions.

“A recent study conducted by the Bureau showed that 93 percent of Namibians believe having access to credit and lending products is essential to achieving financial goals,” she noted.

Burger explained that only finance providers can decide whether to offer credit to a customer, and credit bureaus only provide some of the information lenders use when making the decision, but each finance provider has its own lending policies and criteria including an affordability assessment for granting credit to a consumer, and they use a range of information including what is provided by the consumer at the point of application.