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Credit Data CRB News

Message from Credit Data CRB Ltd

1st August 2016 shall always remain an important memorable day to the Credit Data CRB Ltd Family and we also believe to the financial industry in Malawi. As this is the day the Credit bureau services became officially unopposed operational. As a reminder the CRB Act was passed in 2010 and bureaus became licensed in 2011, unfortunately the roll out became challenging due to different interpretation of the passed act by stakeholders. Parliament on 17th November 2015 amended the act to remove any ambiguity that hindered the roll out of Credit Bureau operations. Having being amended accented to, the effective date was 29th July which fell on a Friday, shifting to the official effective date to 1st August 2016, today 1st August 2017 we commemorate 1 full year of official unopposed of Credit Bureaus Services operations.

The one year journey has been exciting and challenging. The excitement comes from the fact that we finally found the doors that were closed for us for years being finally widely opened. Credit Bureau Services were discussed with open minds. Though exciting and encouraging, we noticed that new challenges emerged, such as the lack of knowledge and appreciation of Credit Bureau services on personal, institutional as well as national level. We had and continue to carry awareness and operational civic education exercises away from providing bureau services. We also experienced difficulties with the data we and continue to receive as it did not have full records to enable us operate effectively.

Another challenge was despite that the passed amendment requires financial institutions to consult bureaus for each and every credit and insurance arrangement this has not been fully adhered to rendering traffic of business for us below expectation and affecting cash flows.

However, there are success stories as in the year the bureau has assisted lending institutions especially banks to avoid credit risk having pulled reports from our bureau. In our statistics, more than Mk500 million which would have been risky lending was avoided. Lenders also found an opportunity to negotiate and agree with banks to restructure borrowings of a figure close to MK100 million.
We also saw the recovery of non-performing loans which would have been written off amounting to over Mk75 million. In another scenario we noticed that over 500 accounts were cleaned up by owners having visited our bureau for clarification.

We are thankful to the government of Malawi for ushering in the new governor Dr. Dalitso Kabambe whose coming in has changed the landscape by the regulatory office to credit bureaus approach and overseeing that bureaus are operating without any hindrances. We also make special recognition to the Ministry of Trade as well as Ministry of Finance for the unwavering support to this cause.

Since licensing, the Microfinance sector supported us and the amendment of the law just cemented our relationship. We are very grateful to the microfinance sector for the support and eagerness to make sure the bureaus are working to benefit all Malawians.

We are also thankful to Bankers Association of Malawi (BAM) Council and Secretariat for the cordial relationship that has emanated since the amendment of the Act. We would also like to make a special acknowledgment to Miss Bernadette Mandoloma, the immediate past president, on the role she played during her tenure to ensure that the banking industry and us work in harmony.
We sincerely wish her all the best and a restful retirement.

In order for Credit Bureau operations to be fully effective and beneficial to stakeholders we need to collect enough credit information but not only enough, but clear and update credit information. This information which assists in making credit informed decisions. It is therefore our appeal that all institutions that are providing the data should continue their efforts of improving the data they are submitting to our bureau but also encourage them to fully utilize the bureau as a source of information as credit decisions are being made so that the risks are reduced to the benefit of their operations.

Thank you all.

Patricia Mwase, MD
Patricia Mwase

Managing Director

The battle is now over – Credit Reports for all

Credit report
[Photo Credit: Credit Report By GotCredit on Flickr]

The battle is now over!

As of 17th November 2015 the government has amended the Credit Reference Bureau act of 2010 through the Credit Reference Bureau (Amendment) Bill 2015 to enable credit bureaus to become fully functional.
Having been facing problems with regards to collecting credit information or data from financial institutions and other information providers, Credit Reference Bureaus in Malawi had not been fully operational. The problems in collecting information resulted in fewer credit reports being produced and utilized. This as a result led to poor decision making processes when giving out loans or services on credit – as can be seen from inflating interest rates and liquidation of some cooperatives.

What are the amendments about?

Under the new amendments to the act, financial institutions are now mandated or required to provide credit information to all credit reference bureaus. This means that you can expect Credit Data CRB to have an ever increasing database of latest and historical credit information on consumers and companies in Malawi.

The amendments to the act also stipulate that before entering into any credit agreement or insurance contract financial institutions shall obtain and consult a report from a credit reference bureau. Put simply, anytime you need to get a loan or an insurance policy, your Credit Report from Credit Data CRB will be used to check your credit worthiness.

How does it affect me?

Whether you are a large company or individual or own a small business, Credit Data CRB will have information on you that it “shares” with financial institutions you interact with.
Your credit history including loans, utility bills and any other services you’ve obtained on credit will be available to your lender. This will help them determine whether you are a good candidate for a loan/credit service or not.

What can I do?

Get your credit report from Credit Data CRB today to make sure that your report shows your integrity as a borrower or to help you clear out loans you forgot you had.

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