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RBZ Governor John Mangudya

 Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) says a credit registry facility that it mooted to arrest an upsurge in non-performing loans is now operational.

Amendments to the Banking Act provided for the establishment of a credit registry so that banks are able to vet all borrowers for credit worthiness for purposes of managing bad loans.

As at December 31, 2016, the Zimbabwe Asset Management Company (ZAMCO) had acquired non-performing loans (NPLs) amounting to $812,52 million, which comprised proprietary portfolio ($548,66 million) and managed portfolio ($263,86 million).

In his 2017 monetary policy statement presented last week, RBZ Governor John Mangudya said banking institutions were already providing their loan records to the registry and updating the records.

“The credit registry system is now operational after it went live with effect from January 2017. In line with the phased implementation approach, which the Reserve Bank adopted, banking institutions are already providing their loan records to the registry and updating the records regularly with payment patterns of clients when repayments are effected,” he said.

As at January 31, 2017, said the Governor, a total of 104 000 loans or 25 percent had been uploaded to the credit registry, which is expected to enhance the credit culture among borrowers spurred by banking institutions, microfinance institutions and other credit providers.

It is hoped that the credit registry will significantly add value to banks’ and microfinance institutions’ credit risk management and governance systems as well as bring down the level of NPLs across the sector going forward.

“The credit registry is also a readily accessible repository for credit data, which is expected to facilitate a reduction in lending rates as financial institutions can easily access and assess information and price their risks accordingly,” said Dr Mangudya.

He also pointed out that as a result of the setting up of a credit registry, loan processing turnaround time was also expected to be significantly reduced.

“With effect from January 2017, the Reserve Bank commenced the process of registering various credit providers such as banking institutions, microfinance institutions, deposit-taking microfinance institutions and credit shops as subscribers in the credit registry system to enable them to access the credit registry database,” he said.

As such, during the quarter ending March 31, 2017, the Reserve Bank will commence the second phase of the credit registry system implementation. This exercise entails the incorporation of other data providers such as deposit-taking microfinance institutions, micro-finances, credit granting departmental stores and utility bodies.

“This will effectively broaden the scope of credit data warehoused by the credit registry for the benefit of all subscribers.

“The Reserve Bank will also embark on the process of licensing the private credit bureaus during the first quarter of 2017,” said Dr Mangudya.

He also said ZAMCO will soon commence a third and final acquisition phase of the NPLs secured by mortgage bonds.

Zamco was established by the Reserve Bank of Zimbabwe in 2014 and started operating last year to arrest the scourge of NPLs by buying out from the commercial banks their collaterised loan books.

— @okazunga