‘Most bank loans in credit registry’ Reserve Bank of Zimbabwe

Business Reporter
EIGHTY-four percent of loans in the banking sector have been uploaded to the Reserve Bank of Zimbabwe’s credit registry, which went live recently, the Office of the President and Cabinet, which is spearheading doing business reforms, said.

The percentage figure represents 314 833 out of a total of 371 485 bank loans extended to 361 525 individuals and 9 960 firms since the RBZ’s credit registry became operational in January this year, the OPC said in an update statement yesterday.

The OPC said Zimbabwe’s 19 bank are subscribers to the credit registry, meaning the banking institutions are required to check with it before granting loans in order to get information on the credit history of the applicant before granting loans.

The credit registry addresses Zimbabwe’s ease of doing business deficiencies relating to getting credit and explores two sets of issues, strength of credit reporting systems and effectiveness of collateral and bankruptcy laws in facilitating lending.

“As of May 23, 2017, the credit registry had loaded 84,75 percent or 314 833 banking sector loans in the data base,” the OPC said.

The credit registry is now in the process of registering the top 20 micro-finance institutions to the system.

“These institutions represent 84 percent of the assets of the micro-finance sector and once registered will have full access to the registry with effect from May 30, 2017,” the OPC said.

Plans are underway to co-opt the rest of the micro-finance institutions, numbering approximately 160, when their personnel have under gone training. The RBZ will commence training of micro-finance institutions as data providers in June 2017.

In creating the credit registry, the RBZ consulted key stakeholders to ensure it was “fit for purpose” and able to address the concerns of key stakeholders in the micro-finance sector.

Studies have shown that comprehensive data on consumer credit histories significantly reduces the costs to new lenders and may eventually enable the banking and micro-finance sectors to tap into global capital markets to obtain funds for lending.

The credit registry is part of ease of doing business reforms to improve Zimbabwe’s attractiveness to foreign and domestic investment, reduce cost of doing business, improve performance of public utilities in delivering quality service to the people as well as create value for money in providing services.

The reforms target 10 key global indices for ease of doing business and these are starting a business, getting credit, protecting minority investors, resolving insolvency, paying taxes, enforcing contracts, trading across borders, construction permits, registering property and getting electricity.

Government expects that the ease of doing business reforms help drive Zimbabwe to a higher position on the World Bank’s competitiveness rankings. Zimbabwe slipped on the global competitiveness by one place to 126 out of 139 countries during the period 2016-2017 due difficult condition for doing business, the Global Competitive Index report showed.

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