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Credit Reference Bureaus mark 100 days, challenges remain

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Some players are yet to submit data to Credit Reference Bureaus (CRBs), close to 100 days after credit bureau services were made official.

Credit Data Managing Director, Patricia Mwase, has confirmed that most players have not submitted all the data as required by law which should date back to 2014.

The revelations come as the country is preparing to celebrate 100 days of official credit data services on Friday this week.

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President Peter Mutharika assented to the revised Credit Reference Act following approval of its 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/client confidentiality.

But Mwase said most players are not checking with the bureaus on the loan or policy arrangements as required by the law.

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“In addition, some of the data we are receiving requires a lot of cleansing before being uploaded in

the system and that requires a lot of time and manpower,” she said.

To mitigate the challenges, Mwase said the credit bureaus are engaging Bankers Association of Malawi (Bam), Microfinance Network and Insurance Association of Malawi.

She said while most stakeholders are cooperating, the country still has a long way to go to embrace credit bureau services being a relatively new phenomenon.

If successfully implemented, the bureaus will assist in negotiations for lower interest rates for low risk borrowers.

“Why should an honest borrower be charged the same rate as the high risk borrower? We are encouraging Malawians to check with us if we have their information and if it is it a true reflection of their credit history,” Mwase 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.

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