105 SUBSCRIBE TO CREDIT REGISTRY SYSTEM

The credit registry system so far has 104 subscribers carrying a total of 350 000 banking sector records, the Reserve Bank of Zimbabwe (RBZ) has said.

This came after Creditinfo, a credit checker from the Czech Republic, was awarded the tender to set up the system aimed at improving credit risk management in the country’s financial sector.

“As at December 31, 2017, the credit registry system had a total of 350 000 banking sector credit records, which are updated on a continuous basis. There are currently 104 subscribers in the registry,” RBZ governor John Mangudya said in his monetary policy.

The credit registry was established to profile the credit history amid revelations, there were multiple borrowers who were defaulting in paying back the loans.

At its peak, the non-performing loans (NPLs) ratio was 20,45%, raising fears banks would cut back on lending.

Mangudya said the quality of the banking sector loan portfolios had improved over the years with the NPL ratio at 7,08% as at December 31, 2017, down from 7,87% as at December 31, 2016, as banks continue to strengthen their credit risk management systems, in the aftermath of balance sheet clean up through disposals of NPLs to Zimbabwe Asset Management Company.

He said the process of broadening the subscriber base and data providers such as microfinance institutions and other non-bank subscribers was already in progress.

Meanwhile, banking institutions and the microfinance sector are expected to prime their systems and to re-orient credit practices in order to take full advantage of the collateral registry system, which is anticipated to promote financial inclusion.

Mangudya said RBZ had made significant progress in enhancing the credit infrastructure through the establishment of a Credit Registry and operationalising the Collateral Registry.

The improvement in the credit reporting environment is expected to improve the general credit culture across economic sectors.

He said the Movable Property Security Interests Act [Chapter 14:35] was gazetted in July 2017 paving the way for establishment of the Collateral Registry with numerous preparatory activities have been successfully undertaken including the drafting of Movable Property Security Interests Regulations.

It is anticipated that the regulations would be gazetted during the first quarter of 2018 and the Collateral Registry operational by June 30 2018.

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