Credit Reference Bureau goes live

The Sunday Mail

Harmony Agere in KARIBA
THE Reserve Bank of Zimbabwe (RBZ) says the Central Credit Reference Bureau, which is designed as a portal to access the credit history of the transacting public, went live last week, raising hopes that companies will be able to enhance their risk management systems.

Addressing stakeholders in the microfinance sector gathered here for the Zimbabwe Association of Microfinance Institutions (Zamfi) annual Winter School, RBZ bank supervision division deputy director Mrs Rachael Mushosho said the system is meant to protect lenders from bad debtors. “The RBZ has completed setting up the Central Credit Reference Bureau and it went live last week,” she said. “Now financial institutions cannot lend money before referring to the database. This protects the institutions and the borrowers themselves.”

Currently, the system is only accessible to commercial banks. “In phase 2, which is our next step, MFIs will get access to the system which will enable them to protect themselves from serial defaulters.”

Creditinfo, a credit checker from the Czech Republic, was last year awarded the tender to set up the system at a cost of US$1,8 million. It is believed the bureau will help improve credit risk management in the country’s financial sector.

Zimbabwe has one of the highest banks’ non-performing loans (NPLs) ratio. As at December 31, 2016, sectors with the largest proportions of NPLs were individuals (18,4 percent), commercial (14,3 percent), mining (13,1 percent) and agriculture sectors (12,3 percent).

Zamfi board chair Mr Patrick Mangwendeza told The Sunday Mail Business last week that those local laws, in some instances, tended to overprotect the borrower rather than the lender. “We have raised a number of issues with the regulator and we are pleased that they are looking into it,” he said. “The floor raised issues like the perceived penetration of commercial banks into our market and i am sure by the end of the workshop these would have been ironed out.”

Zamfi is also lobbying the RBZ to extend the licence renewal period for MFIs to attract more funding. “Currently our licences run for a year only; this makes it difficult for us to access capital and give the best service to our clients within that period,” he said. “We would like to get into micro-mortgages, say five or six years but we cannot do that in the current conditions.”

MFIs are believed to be the major funders of the informal sector, whose industry has grown to more than a billion dollars in value.