Czech firm wins tender for Zimbabwe's credit reference bureau

A Czech Republic credit checker Creditinfo has been awarded a tender to set up the Credit Reference Bureau (CRB) system at a cost of 1.8 million U.S. dollars to improve credit risk management in Zimbabwe's financial sector.

The Prague-headquartered company is a leading service provider for credit information and risk management solutions worldwide having established credit bureaus in more than 20 countries.

Zimbabwean Central Bank governor John Mangudya on Thursday said the Czech Republic company was chosen ahead of several rivals.

The CRB system will among others consist of a credit registry and private reference bureau.

The bureau would enhance the verification process of borrowers, enabling bankers to assess credit risk and reduce the level of non-performing loans (NPLs) in the banking sector.

The system would also allow lenders to determine how much and at what rates to lend. It would induce transparency in the economy as there would be greater sharing of information, making financial institutions aware of their customers'financial exposures.

Credit bureaus are set up to collect individuals, corporate and other legal entities' credit data from a variety of sources and consolidate the information into profiles and make it available on request to subscribers.

This helps enhance financial stability by promoting more robust risk management practices, reducing credit risk, increase the supply of credit to fuel growth-related activities and helping to lower interest rates.

The continued absence of a comprehensive credit reference environment in Zimbabwe has negatively impacted the operations of the financial services sector, resulting in them battling high NPLs. Endit