Friday, October 28, 2011

CREDIT REFERENCE BUREAU (CRB) AFRICA ACQUIRED BY TRANSUNION

27th Oct. 2011 – TransUnion, a global leader in credit and information management, announced today that it has entered into an agreement with CRB Holdings Limited, the parent company of CRBAfrica to purchase a majority shareholding in CRB Holdings Limited, a credit risk management organisation with a presence in eight countries across Africa.
The acquisition significantly expands TransUnion’s footprint in Africa. Building on its existing presence in South Africa, Namibia, Botswana, Zimbabwe and Swaziland, TransUnion can now enhance operations in Botswana and extend its footprint into Kenya, Mozambique, Malawi, Rwanda, Tanzania, Uganda and Zambia, bringing a wide range of credit reporting and risk management solutions to these emerging markets. Terms of the transaction were not disclosed. Closing of the transaction is subject to satisfaction of customary conditions to closing and regulatory approvals.
“For TransUnion, broadening our presence in Africa is part of our strategy to open opportunities for both businesses and consumers, helping to fuel economic growth in these evolving credit markets,” said Edward Khoury, Group CEO TransUnion Africa. “We are delighted to be working with CRBAfrica and leveraging their experience and relationships within these countries to introduce to the local markets the many benefits of credit-information.

In addition to supporting new retail and banking customers in the region, this will also enable our large customers in South Africa to launch operations further into Africa, whilst being assured of Credit Bureau support.”

With a population of approximately a billion people and a strong gross domestic product, Africa is increasingly the focus of both local and international commercial interest and investment. The benefits of this investment are widespread, but the introduction and influence of credit bureaus in particular are expected to have a significant effect on the economies of Africa in the medium term and positively impact job creation, specifically at a Small, Medium and Micro Enterprise (SMME) level. Moreover, at a social level, studies have shown that widening access to regulated credit fosters positive results for the distribution of wealth.

According to Michael Karanja, Chairman of CRBAfrica, the synergies between the two companies will enable the combined business to offer clients an even more compelling value proposition. “With over twenty years’ experience in credit referencing and debt management in Africa, we have built strong relationships with our clients and pride ourselves on our high business ethic, as well as our commitment to our people and the region as a whole,” Karanja said. “As part of TransUnion, we will have the global reputation, expertise, systems and suite of solutions to dramatically enhance our services within the region.”

Khoury and Karanja also stressed the point that there are no plans to make any changes to personnel or management, and that it is very much “business as usual”. Once the purchase is complete, the markets will begin learning and seeing a wider range of product and service offerings as the transition to the TransUnion brand occurs.

About TransUnion

As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analysing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. TransUnion reaches businesses and consumers in 23 countries around the world. Based in Johannesburg, with global headquarters located in Chicago in the US, TransUnion is one of South Africa's oldest credit bureaus. Visit www.transunion.co.za or www.mytransunion.co.za for more information.

About CRBAfrica

CRBAfrica, headquartered in Nairobi, Kenya is Africa’s largest networked credit reference bureau and debt management outsource organization with current operations in eight African countries employing 300 employees. By combining a highly skilled, multilingual indigenous workforce, a wide range of unique products and services that reflect each local operating environment and a fully-integrated geographic reach, CRBAfrica has pioneered the development of credit bureau and debt management services across the African continent to allow major banks, credit card companies, financial institutions, microfinance and multinational commercial enterprises to reduce their credit risks. www.crbafrica.com
From Vuma Reputation Management

Wednesday, October 19, 2011

THINK TWICE BEFORE SWIPING THAT CARD

By James Ratemo, Business Daily Thursday, October 13  2011
A friend of mine who has been using a credit card for several months was recently surprised at how far banks were willing to go to ensure his financial ‘comfort’.
This friend, let us call him Jack, likes making purchases  using his credit card and repaying 100 per cent at the end of every month.
One day,  he suddenly realised the bank had blocked his card.
He was surprised because he had never defaulted on his payments. He went to  the bank for an explanation.
“The bank official told me they had monitored my card and thought I was straining because after paying my monthly expenditures, my account remained almost empty...so  he suggested that I pay 50 per cent of my bills instead of the 100 per cent I was used to,” explains Jack.
A critical look at what the bank wanted Jack to do reveals that the bank would be the ultimate beneficiary since paying the way they recommended means additional interest on the credit carried forward.
Jack pays Sh2,500 as the annual fee for the credit card.
If you pay 100 per cent promptly every month, there is no interest accrued meaning the only cost you incur is the annual fee, which in  Jack’s case is Sh2,500.
However,  after Jack changed his repayment plan to 50 per cent, it meant the remaining 50 per cent is carried forward,  attracting a 3.5 per cent interest.
This may sound logical since it gives Jack more time to repay but ultimately it proves expensive.
Today,  banks are literally ‘hawking’ credit cards to clients in the hope of increasing their income portfolio.
Most banks allow customers to repay anything between 5 per cent to 100 per cent. Of course, the longer you take to pay, the more expensive it becomes. So watch out.
Credit cards  encourage you to spend more at very high interest rates which is why the card companies or banks coax customers to own one.
Always endeavour to repay your credit in the shortest time possible. In fact it would be wise to repay 100 per cent every month to avoid paying interest. Otherwise the best option would be to use cash instead of entering a cycle of  indebtedness.
According to one online financial advisor, by spending more than they can actually afford each month, individuals end up paying very high interest charges each month.
Because you are only billed once a month, it is also very easy to forget about purchases you have made using a credit card. You may end up with a very unwelcome surprise at the end of  the month once you see just how many purchases you signed for during the past 30 days!
Any unpaid balances are charged very high interest rates that will quickly add up.
If you continue to pay only the minimum amount, your unpaid balance can easily become unmanageable.
Credit cards can be dangerous for people who are not good at budgeting.
It  is very easy to overspend because you don’t need to pay for your purchases upfront.  Somehow,  signing a piece of paper at the time of purchase doesn’t always feel like you are actually spending money.
Financial experts argue that if you cannot trust yourself with a large credit limit then call your provider and demand it to be lowered.
Spending when abroad
Whenever you use your credit card abroad, depending on your bank,  you can be charged around 2.75 per cent for the foreign exchange loading fee and then a handling fee of around 2.5 per cent if you draw money out from a cash point machine or bank.
According to Mr Steve Kamau, Group Business Development manager, Credit Reference Bureau of Africa Ltd, out of the total loan defaults reported between August last year and this year, 23 per cent were credit card related.
CRB provides those who subscribe to it such as banks with solutions to credit risk management such as payment history information of individuals and corporates.