Zim scores low on credit indicators

via Zim scores low on credit indicators – NewsDay Zimbabwe July 27, 2015 by Tatira Zwinoira

ZIMBABWE has been given a three out of eight score on a scale of indicators that specifically deal with credit, a World Bank financial analyst has said.

Speaking to NewsDay, World Bank credit bureau principal specialist Luz Maria Salamina said one major indicator that needed to be worked on was to allow the consumers to know their report, to look at it and complain if they feel there is information that is not accurate.

“Like in commercial banks, there is always a way to refinance your loans, as long as they (World Bank and government) are talking it is always a good sign,” Salamina said.

“The fact that we are here promoting this private and public interchange is also a sign for the development of Zimbabwe.”
The three scores that the country had were online access to credit information, positive and negative information, and historical data for more than two years.

However, the ones that the country failed to get were establishing a law that borrowers can inspect their data in the bureau, providing information on consumers and companies, information of all types of data (retailers), credits of all amounts and having a credit scoring.

“There are two types of credit, the credit that consumers get and the purpose of that credit is to enhance the way of life of people,” Salamina said.

“The other type of credit is the credit to businesses particularly small businesses that are the ones that move the economy because they are the greatest composition of economic units in any country.

“This is the most important, a productive credit that reverts to the economy and if you manage to have a domino effect then you will have better performing consumers and companies in general and in the economy.”

Salamina said that having a credit bureau was to help develop systems that in a way also participate together in the private sector and the public sector.

She said “there are roles in each party to make credit function in a responsible manner.”

This measurement is the general standard used by the World Bank to establish a country’s credit rating.

Sub-Saharan Africa has the lowest rating with Zimbabwe being slightly above the average.

However, despite the fact that Zimbabwe is above the average, the credit bureau coverage reported in the country is still very low.

“Through the credit information bureau you can show that you have a good history, pay your credits on time, and that you have stable income, then they will rely much more on you and have trust in you to give you more money,” Salamina said.

Government is currently looking to pass legislation for the establishment of a credit bureau.