Credit Reference Bureau Report and Lending Decision of private Commercial Bank in Ethiopia

No Thumbnail Available



Journal Title

Journal ISSN

Volume Title


Addis Ababa University


With the adoption of the Credit Reference Bureau regulation in Ethiopia in 2012, Commercial banks in Ethiopia have been mandated to share credit information with the CRBs in order to set up a database for all borrowers and enable checks and balances in the credit market. Therefore, the purpose of this study was to identify the role of CRB on lending decision of private commercial banks in Ethiopia. Specifically, the study sought to examine the following research objectives: the registration process, the information collected from borrowers, the information update by other banks, the use of the credit information and the regulatory requirement. The study used a descriptive research design and adopted the mixed research approach. The study used questioner and interview as a data collection method. The target population was 128 employees working in private commercial banks as a credit analyst and credit officer and 6 directors and 7 division managers were participated in the interview. The sample size of the study was 97 employees and the study used convenience sampling technique to draw the sample responses of the questionnaires were analyzed, processed and tabulated by use of a computer Statistical Package for Social Science (SPSS) version 23.0 program. The data collected was cleaned then coded and checked for any errors and omissions. Frequency tables and percentages were used to present the findings. The study found out that almost 100% agreed that registering in credit information system needs to get permission from the bureau, on average 70% of the respondent agreed that commercial banks use the credit information for lending decision, 58% of disagreed that the information collected from borrower are not accurate, 79.4% of the respondent agreed that banks update credit information of their borrowers continuously and almost 100% of the respondent agreed that the regulatory requirement meet by the banks. The study recommended that the credit reference bureau to upgrade the server, to use multiple sources to compiled the data, put stringent penalties for those who violates the directives, and also the study recommends the commercial bank management to use the credit history of the borrower to set interest rate.



Credit information sharing, Credit Reference bureau