Speech at the Credit Data Launch of be the first to know Campaign

The Deputy Minister of Finance, Dr. Cornelius Mwalwanda; and all Government Officials ;
Managing Director, Credit Data CRB
Chief Executive Officers of various organisations present here;
Distinguished Guests; Ladies and Gentlemen

It is an honour and it gives me great pleasure this evening to be with you at this Celebration of 500,000 Data Entry Mark and Launch of “Be the first to know” Campaign. This gathering is important in several aspects.

First, it accords an opportunity to appreciate and take stock of what Credit Reference Bureaus and the microfinance industry has done and achieved following passing of the Credit Reference Bureau bill by Malawi Parliament in 2010 of which Credit Data CRB Ltd is one of the licensees.

Secondly, the gathering will appreciate and benefit from the level and scope of representation this evening. I can see participants from the microfinance industry, government institutions, accountancy profession, private sector and other key stakeholders. This shows serious commitment to the efforts of Credit Data  CRB Ltd rolling out the Credit Bureau Services.

Ladies and Gentlemen, the importance of the microfinance industry to the economic development of the country cannot be over emphasized. Microfinance service providers are playing a pivotal role in the government’s drive to extend financial services to previously underserved populations. Nevertheless, Ladies and Gentlemen, for the microfinance institutions efforts to have an impact on the citizenry and the country’s economy there is a need for collective collaborations amongst all the players – that is where the Network and Credit Reference Bureaus come in.

Ladies and Gentlemen, introduction of Credit Reference Bureau services opens a new chapter in the credit appraisal process and also allow me to reiterate the benefits of Credit Reference Bureaus to the microfinance finance sector, which are as follows:

  • The CRB is expected to improve the performance of the Malawi’s financial sector and stimulate economic development by making lending and borrowing easier faster, and ultimately cheaper.
  • Borrowers can use their positive credit history as “collateral” to access loans at better rates and seek more competitive terms from different lending institutions
  • By addressing the problem of information asymmetries, the CRB supports an increasing level of trust between lenders and borrowers – resulting in an increased volume of credit in the economy. This trust also will increase transparency and competition between lenders.
  • Timely and accurate information on borrowers’ debt profiles and repayment history enables financial institutions to make more informed lending decisions
  • As the data on the system is built up, the information available will enable loan processing to become simpler and faster, collateral requirements to be streamlined, default rates to be reduced and, ultimately we believe loans shall become cheaper.
  • Participating Financial Institutions will, therefore, be able to offer new products and offer competitive interest rates due to availability of information on customers’ credit risk profiles.

Ladies and Gentlemen, let me update you on the progress the microfinance sector has made on the regulatory front. To date 9 have been licensed as Non-Deposit Taking MFIs while 11 have been registered as Micro-Credit Agencies. We anticipate that the sector will be registering more than 20 microcredit agencies by December 2014.
Let me conclude my remarks, Ladies and Gentlemen, by calling upon all of us to work together in incorporating recent innovations and initiatives in our operations for the betterment of our clients and the nation at large.

My remarks would be incomplete if I do not express gratitude to the heads of various institutions gathered here. I know the importance of the work you all do. Your presence here reflects the commitment you have to the efforts of Credit Data CRB Ltd.

I thank you all.