Credit bureau on cards

BeB group chief executive Mr Ken Bvepfepfe said all hardware and software systems were already in place and should be fully functional by January 1, next year.

But BeB would first have to receive the all- clear from the Reserve Bank of Zimbabwe after a presentation the firm will picth to the central bank today.

“Everything — the software and hardware — is all now in place and want to ensure all is ready by January 1, 2013.

“But we have to get the approval of the Reserve Bank of Zimbabwe first. We are going to make a presentation to the central bank on Friday (today),” he said.

Credit bureaus are set up to collect individuals, corporates and other legal entities’ credit data from a variety of sources, consolidate the information into profiles and make it available on request to subscribers.

Currently, Zimbabwe has no active credit bureau and calls have been made from across various quarters for the establishment of a national credit bureau.

There has been growing appetite for credit following the return of credit facilities in Zimbabwe due to a stable economy and macro-economic stability.

Zimbabwe’s financial sector would also change dramatically once the National Credit Bureau becomes operational, as absence of such a critical facility has created information asymmetry in credit vetting.

According to the Bankers’ Association of Zimbabwe it is believed that a number of companies are over borrowed resulting in high loan defaults rates.

BAZ contends that this phenomenon is likely to be the driver of non-performing loans estimated around 7 percent.

In Shanghai, China, the rate of non-performing loans fell from 6,67 to 4,52 percent after a credit bureau was set up.

A study in Argentina revealed that with a targeted loan approval rate of 40 percent, loan default rates could fall by 79 percent in smaller financial institutions once a credit bureau is introduced into the market.

In Zimbabwe, a national credit bureau would allow lenders to determine how much and at what rates to lend.

It would induce transparency in the economy, as there will be greater sharing of information while consumers would be more aware of their financial exposure.

The bureau would promote loan repayment culture, ensure easy access of information by banks, easy assessment of credit risk at sectoral level and help borrowers build good profiles for more bargaining power.

The bureau would also help banks combat fraud, reduce bad debtors, enhance financial stability and processing of loan applications to key sectors such as agriculture.

BeB Group comprises BeB Management Consultants, Executive Search, Magfair Debt Collectors and Tracing Agents, Employment and Executive Services, Ultimate Chickens, BeB Accounting, BeB Asset Management and National Credit Bureau.