Bankers call for credit bureau

HARARE - The country must establish a credit bureau to avoid malpractices in the banking sector, Bankers Association of Zimbabwe (Baz) president George Guvamatanga said.

Speaking at the Zimbabwe High-level Economic Forum in Victoria Falls, Guvamatanga said banks did not have the aptitude to determine loan defaulters so there was need to establish a platform to protect them.

“The sector must take on all players to create the bureau so that the collapsing sector is saved from further collapse, members must be engaged even on interest rates,” Guvamatanga said.

The Baz president said non-performance loans had greatly affected the sector and immediate action was needed to resuscitate the ailing sector.

“At the moment banks do not have the capacity to determine who is borrowing from whom, some of them are choking,” said Guvamatanga.

He said there was need to align interest rates, both on deposits and loans, with the level of non-performing loans, which newly-appointed Reserve Bank of Zimbabwe (RBZ) deputy governor Khupikile Mlambo said stands at 12,2 percent.

The setting up of a credit bureau will reduce the vulnerability of banks to risky borrowers according to players in the sector.

The Baz boss said the prevailing bank charges are a mere symptom of the operational challenges in the country. A survey carried out by Baz shows that the average account maintenance fee is $5 per month.

This comes at a time when the RBZ is finalising plans to set up an Ombudsman’s Office for the country banking industry to help curb growing irregularities in the sector.

Banks have been closed in recent years after having been found to have violated the country’s banking laws.

Officials said the Ombudsman’s Office for the industry would mainly focus on protecting the banking public from unscrupulous bankers and banks.

According to Guvamatanga, the establishment of the Ombudsman’s Office had been agreed with the Central Bank, and would help restore the public’s confidence in the industry.

“The Ombudsman’s Office will be an independent body where the banking public can go for arbitration if they are not satisfied with the outcome of their complaints,” Guvamatanga said.

According to media reports, more than three quarters of money in circulation in the country is held outside the banking system.

The RBZ says the concept of the Ombudsman’s Office for the banking industry was working well in other countries.

“We want the public to have confidence in the banking sector. Right now the public does not trust the banking system.”

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