Reserve Bank of Malawi (RBM) has asked commercial banks and other lending institutions to utilise the presence of credit reference bureaus (CRBs) by submitting credit information to the bureaus for easy identification of credit-worthiness of individuals and companies.
RBM director of bank supervision, Eldin Mlelemba, made the remarks on the sidelines of a credit bureau law workshop in Zomba on Friday.
He said the central bank regards CRBs highly.
He said CRBs play a crucial role in collecting and maintaining credit information for the mutual benefit of lenders and borrowers.
“A well-functioning, developed and transparent financial market increases incentives for investor participation, thereby promoting the savings and investment culture which ultimately translates into sustainable economic growth and development of an economy,” he said.
On her part, Credit Data CRB managing director Patricia Mwase said lack of knowledge on the functions of CRBs remains an issue in the implementation of the credit reference law.
“To the contrary, we are a beneficial institution to the economy as we keep both negative and positive information. We are, however, hopeful that such platforms will help iron out the miscomputations of CRBs,” she said.
Mwase said failure to implement a sound law on CRB pose a threat to an economy as investors shun investing in an economy without sound credit reference.
Speaking on behalf of the Bankers Association of Malawi, FDH managing director Eric Ouattara said banks are ready to commit to the new law and submit credit information to credit reference bureaus.
Ouattara, while admitting that financial institutions have not been willing to provide information requested by CRBs, said most banks have now understood the importance of having credit background of every customer, urging other players to make use of CRBs.