In any case, the high ROAs and ROEs are not sustainable in the long term as customers cannot afford the high cost of banking services indefinitely. Second, risk-based credit pricing is imperative. In CBK’s vision, customer credit histories must amount to something. Good credit histories portend a less risky customer and therefore lower interest rates.
Customers cannot be treated with a broad brush, focusing on the few defaulters while not rewarding the majority of customers who have good credit histories. The rationale of credit information sharing is to address information asymmetries and enable banks to more effectively price credit risk.