Central Region leads in credit access—CRB

A report by Credit Reference Bureau (CRB) has shown that the Central Region is leading in terms of accessing credit despite registering high default rates.

CRB managing director Patricia Mwase said this in  Blantyre on Friday during her presentation on the First Credit Trends Report during the CRB 100 days of official business in Malawi.

She said at 44 percent, the Central Region is leading in terms of credit access, followed by the Eastern Region at 36 percent and the Southern Region at 15 percent while the Northern Region has the lowest rate at five percent.

However, Mwase said despite having more people accessing loans from the Central Region compared to the Northern Region, the North has the highest debt servicing ratio, followed by the South, East and the Centre.

She said many men are accessing credit at 65 percent more than the females at 35 percent, mainly through groups.

“Most of the females in Malawi do not own property as most of it is owned by the male fraternity, which hinges on women’s access to loan opportunities,” said Mwase.

But she said non-compliance remains a challenge, which is limiting the bureau from getting enough data on credit histories.

“The challenge that we have is that we are not being given the data as the law requires these financial institutions to do. The law requires that they give us data dating back to 2014.

“While some industries such as banks have tried to be compliant enough to give us the data, although not in line with the law, some industries are yet to give us the data, including the microfinance and a few insurance companies,” she said.

President Peter Mutharika assented to the revised Credit Bureau Reference Act following amendments in Parliament on November 17 2015.

The amendment to the Act, which was initially enacted in 2010, was aimed at freeing institutions such as banks to provide information of clients to CRBs without running the risk of breaching bank or client confidentiality.

While applauding the success of the CRB in its 100 days, Ministry of Industry, Trade and Tourism deputy director of private sector development George Mwase said government will ensure that concerned stakeholders are compliant to the law.

“In 100 days, we have seen that they have so far registered over two million applications and processed 10 percent of 700 applications that they have received.

“However, it is of concern for the ministry to learn that despite the good story we are now telling, compliance with operations is becoming a challenge,” he said.

The CRB Act makes it easy to scrutinise and certify individuals and companies before they are given loans by banks and other money lending institutions. n