Rwanda has been ranked the most credit-friendly country in East Africa, providing the most ease for borrowers seeking loans.
In a new World Bank report titled ‘Doing Business 2018’ that sought to discern – among other things – how economies in the East African Community (EAC) rank in terms of ease of getting credit, Rwanda was ranked first in the region, followed by Kenya, Tanzania, Uganda and Burundi respectively.
Economies were ranked based on their ease of doing business, using a score from 1 to 190. The rankings were determined by sorting the aggregate distance to the scores of frontier economies on 10 topics, each consisting of several indicators, giving equal weight to each topic.
In the ease of getting credit category, Rwanda received a rank of 6 while Kenya received a rank of 29 as Tanzania and Uganda both received a rank of 55. Burundi came last in the region with a rank of 177
The regional average rank was 64.
The rankings for all economies are benchmarked to June 2017. The distance to frontier (DTF) measure shows the distance of each economy to the ‘frontier’, which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005.
An economy’s distance to frontier is calculated on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier.
Rwanda’s distance to frontier score (on a scale from 0 to 100) was 90, Kenya’s was 75, while Tanzania and Uganda both scored 65 and Burundi scored 10.
“The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level,” the World Bank said in a recent statement.
Launched in 2002, the Doing Business project looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.
“Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation,” the statement added.