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Credit reference system to go live Monday

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The Credit Reference Bureau, a system which contains credit history report of a prospective borrower before granting credit is anticipated to go live on Monday, Reserve Bank of Zimbabwe John Mangudya has said.

BY FIDELITY MHLANGA

John Mangudya
John Mangudya

This came after a Czech Republic credit checker, Creditinfo was in April last year awarded the tender by the apex bank to set up the system at a cost of $1,8 million with a view to improve credit risk management in the country’s financial sector.

“We are quite happy with progress we are now going live on Monday. Most banks have finalised giving us data to put in the system. They (Creditinfo) set up the system we have sent our team for training and now they know how to operate the system. So they (Creditinfo) will host the system,” Mangudya said at the sidelines of the Macro-economic and Financial Management Institute of Eastern And Southern Africa (MEFMI) breakfast meeting in Harare yesterday.

The credit reference bureau is anticipated to improve the bank’s non-performing loans ratio which declined to 7,87% as at 31 December 2016 from a peak of 20,45% courtesy of the disposal of loans to the Zimbabwe Asset Management Company (Zamco).

As at December 31, 2016, sectors with the largest proportions of NPLs were individuals, commercial, mining and agriculture sectors, which constituted 18,41%, 14,30%, 13,13% and 12,28% of total non-performing loans, respectively.

Mangudya told delegates at MEFMI that financial institutions must know the source of funds of their depositors in a bid to stamp out ills such as money laundering and funding of terrorism.

“As a financial institution we need to know the source of wealth for your customers. The so-called KYC (Know Your Customers). If you are a financial services sector and you don’t know the source of wealth and funds of your customers then you are taking a very high risk. You know the trend. If John Mangudya works at RBZ and banks with bank X you know that by the 20 or 25th of the month the salary goes into his account .That is KYC. You know the trend,” he said.

“If you see tomorrow John Mangudya has $1 million thrown in his account that’s a suspicious risk as an institution and such institutions are not good. Both the customer and the institution will lose their license.”

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