Effectiveness of credit information bureau in Tanzania: the case of Tanzania Bankers Association (TBA)

This study aimed to evaluate the effectiveness of credit information bureau system in the context of Tanzania. The framework was developed to explain the key determinants of system effectiveness which are availability of information, quality of the system, quality of the information, quality of services and usefulness of the system. To provide a factual base for the study, the case study approach was used to collect the quantitative data through questionnaires which were tested using regression model. The model also was used to test reliability and validity of the study. The results of Cronbach`s alpha coefficient indicate greater internal consistency of items in the scale and the measure of sample adequacy Kaiser-Meyer-Olkin indicate that, the sample was adequate enough for factor analysis. The regression results indicate that all five factors are statistically significant and positive correlated meaning that they can be used in determining the system effectiveness. However, Usefulness of information and quality of the services indicate strong correlation than other factors. Quality of information is determined by its accuracy, relevancy, comprehensiveness and timeliness. The operational service quality by its quick responsiveness, assurance, empathy, and follow-up service of the organization is an important tool for the system effectiveness. Usefulness of the system is an important aspect for the system effectiveness which supports the users in decision making and problem solving activities. System quality which is determined by the individual perception of a system’s overall performance is a key determinant of system effectiveness. Finally, the study recommended that, Bank of Tanzania should ensure that proper Credit Information Bureau policy is formulated and implemented in banking industry and the Government as a policy maker has to recognize the implementation of Credit Information Bureau policy and develop adequate strategies to support the implementation of the system in order to control the country economy.