CRB integration and non-performing loan risk at platinum credit limited, Dar es Salaam, Tanzania

Abstract

This business case focuses on the integration of Credit Reference Bureau (CRB) systems within Platinum Credit Limited, one of the leading microfinance institutions in Tanzania, and their effectiveness in tackling the ongoing challenge of non-performing loans (NPLs). Platinum Credit Limited found itself at a strategic crossroads on the potential benefits of the credit reference bureau services versus the impact of CRB on mitigating the risk of the non-performing loans. This dilemma required a strategic approach, as the problem mentioned lies not in the existence of CRB systems but in their partial or ineffective implementation at the institutional and employee level. The case utilises a descriptive approach supported by qualitative interviews and document analysis to identify institutional, technical, and behavioral obstacles to CRB usage. The case highlights the strategic decisions and interventions implemented by Platinum Credit Limited, grounded in theories such as information asymmetry, adverse selection, and moral hazard, supported by insights collected from the best practices of Tanzania’s finance industry. Through qualitative data, including interviews and document analysis, this case study presents a detailed narrative of Platinum Credit Limited’s efforts to navigate the challenge of non-performing loans (NPLs) through CRB integration. This case study provides essential strategies to address the integration of CRB in response to the rising of the non-performing loans (NPLs). The proposed solutions combine policy, technology, human capacity, regulatory cooperation, and borrower engagement. Each solution includes operational benefits with its estimated cost, clear justification, measurable targets, risks, and mitigations. The business case concludes that substantial CRB adoption should go beyond mere compliance to encompass operational integration and strategic alignment. In this way, Platinum Credit can considerably lower NPLs, improve credit quality, and secure sustainable growth within a competitive financial market.