Regulatory framework for credit bureaus on cards

Kudakwashe Pembere Business Reporter
CONSULTATIONS on the establishment of a regulatory framework for credit reference bureaus are at an advanced stage, a Reserve Bank of Zimbabwe official said. Speaking at a Micro Finance Institutions workshop hosted by Mustard Seed Consulting, RBZ registrar of financial institutions Mr Norman Mataruka said the central bank is close to concluding the regulatory framework for credit bureaus.

“We are at an advanced stage in discussing credit reference bureaus. We yet to find a funding partner for this,” he said.

“Credit bureaus provide information such as a borrower’s previous loan performance which is a powerful tool to predict future behaviour.

“This helps lenders assess credit worthiness, the ability to pay back a loan, and can affect the interest rate and other terms of a loan
“There are also issues to do with the privacy of information and the associated sensitivities, it is important that the Government through its various arms comes up with legislative framework that will create a win-win scenario for the economy and the various economic agents without prejudice to any one section,” said Mr Maturuka.

Analysts are of the view that given that ultimately all credit providers are reliant on banks to some extent, a well-functional credit reference bureau will help in maintaining financial stability in an economy.

Mr Maturuka added that Zimbabwean micro finance institutions are still far away from becoming micro banks on the back their failure to meet the stipulated requirements.

Mr Mataruka also said MFIs are seriously under-capitalised and only offer a limited range of financial products while charging excessive interest rates.