Credit bureau by year end


Zimbabwe Investment Authority chairman, Nigel Chanakira

A CREDIT Reference Bureau (CRB) created by the Reserve Bank of Zimbabwe (RBZ) is expected to start running by the end of the third quarter of this year, a top executive involved in the process said last week.
Zimbabwe Investment Authority (ZIA) chairman, Nigel Chanakira, told a financial markets indaba in Harare that a Czech firm that was awarded the tender to roll out the CRB for US$1,8 billion, was finalising work, which started in April.
“By the end of September the system will be up,” Chinakira told about 100 financial market experts who attended the conference.
“It was put to tender and a company from Czech Republic won. Work commenced in April; we never had something like this before,” he said.
The CRB system is expected to consist of a credit registry and private reference bureau.
The bureau would enhance the verification process of borrowers, enabling bankers to assess credit risk and reduce the level of non-performing loans (NPLs) in the banking sector.
Because of its role, it is seen as one of the cornerstones of the ease of doing business reforms project being led by the Office of the President and Cabinet, where ZIA is an important stakeholder.
Chanakira said the ease of doing business reform project, which started over 200 days ago, had made significant inroads in making the country a better destination for capital.
The days that investors need to register companies have been reduced by about half, while several charges which made investment in the country expensive have been scrapped.
The introduction of the credit reference system is expected to further boost confidence on the country, which has been performing badly on World Bank rankings.
Chanakira said while progress had been achieved, it was important for the country to continuously review its investment climate to keep pace with developments in other countries.
“They are not stopping,” he said.
“They are continuing to reform,” he added.
The CRB would also allow lenders to determine how much and at what rates to lend.
It would induce transparency in the economy as there would be greater sharing of information, making financial institutions aware of their customers’ financial exposures. CRBs are set up to collect individuals’, corporates’ and other legal entities’ credit data from a variety of sources. They consolidate the information into profiles and make it available on request to subscribers.
Creditinfo, the Prague-based firm that won the tender, is a leading service provider for credit information and risk management solutions worldwide having established credit bureaus in more than 20 countries.
Central bank governor, John Mangudya, said a few months ago that the Czech company was chosen ahead of several bidders.
The absence of a comprehensive credit reference environment in Zimbabwe had negatively impacted the operations of the financial services sector, resulting in high non performing loans.
Banks had raised concern over the delays in the establishment of a credit reference system to improve credit risk management in the financial sector.    —

Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette