ENHANCEMENT OF FINANCIAL INFRASTRUCTURE Credit Registry Collateral Registry

ENHANCEMENT OF FINANCIAL INFRASTRUCTURE Credit Registry Collateral Registry

CREDIT REGISTRY

Establishment of Credit Registry • The Credit Registry was established in January 2017, in terms of section 58 A of the Reserve Bank of Zimbabwe Act and access commenced in May 2017. • The Registry is part of the financial infrastructure to enhance credit information sharing, improve credit management/default risk and promote a responsible credit culture.

Credit Registry and Credit Bureaus • The Credit Registry is expected to support the Reserve Bank’s role as a supervisor of financial institutions. • Three privately owned credit bureaus are as follows: FCB, Fincheck XDS • Checking with the Credit Registry before granting loans is compulsory.

A. Checking with the Credit Registry before granting a loan is compulsory. B. The decision responsibility institution. to lend of the remains the microfinance

Value of the Credit Registry Promotes sound risk management Promotes responsible borrowing culture Credit reports and value-added services e. g. credit score Importance of Credit Registry Reduces problems of adverse selection and asymmetric information Supports financial stability and credit market efficiency and stability

Key Information on Credit Registry Reports • Three types of reports: Credit Report; Credit Report Plus and Scoring Report. • Current loans, amount and performance (number of days in arrears). • Credit history – previous loans and the lending institutions. • Affordability calculator. • Scoring report.

Current Status of Implementation • Credit Registry has loaded over 96% of banking sector loans – 370 000. • As at 31 August 2017, Credit registry had 44 registered subscribers including 19 banking institutions, 23 microfinance institutions. • Utilisation of the Credit Registry on an upward trend with cumulative utilisation at 39, 614 reports as at 2 September 2017 up from 2, 840 in May 2017.

Credit Registry Inquiries (Banks & MFIs) 45000 39614 40000 36283 35000 30052 30000 23989 25000 17831 13027 15000 8640 10000 43 26150 20767 20000 5000 32268 909 866 6 -May- 1317 May 17 4126 15058 10614 6165 2011 1102 2840 20 May 17 27 - 3 -Jun- 10 -Jun 17 -Jun 24 -Jun 1 -Jul- 8 -Jul- 15 -Jul- 22 -Jul- 29 -Jul- 5 -Aug- 12 May 17 -17 -17 17 Aug 17 17 829 1286 2039 2475 1974 2413 Cumulative Inquiries 2031 2773 2936 Weekly Total 3222 2161 3902 2216 19 Aug 17 4015 3331 26 - 2 -Sep Aug 17 17

Credit Registry Inquiries (MFIs only) • Utilisation for MFI as at 2 September 2017 was 1, 828, which is only 4. 61% of total utilisation. • Out of the 60 MFIs co-opted as subscribers, only 24 MFI submitted names for registration. • 20 of the 24 registered MFIs, have used the system. • MFIs will be co-opted as data providers on a gradual basis.

Credit Registry Inquiries (MFIs only) 2000 1828 1800 1586 1600 1400 1254 1200 1047 1000 800 634 725 600 353 400 200 3 6 16 47 57 82 176 206 94 111 281 147 332 322 207 242 91 31 25 10 10 3 5/27/20 6/3/201 6/10/20 6/17/20 6/24/20 7/1/201 7/8/201 7/15/20 7/22/20 7/29/20 8/5/201 8/12/20 8/19/20 8/26/20 9/2/201 17 7 17 17 17 7 12: 00: 0 12: 00: 0 12: 00: 0 12: 00: 0 0 AM 0 AM 0 AM 0 AM Cumulative Inquiries Weekly Total

C Fin vic. . . 0 er . l. . ia an c l. S cia an Fin e Lif . . it. Lim 200 FM ity el e Pr iva t . . it. 9 Fid an lo . . . er s( y. L im ur nt Ce nd le B. 2 Ed u an ey on /a st an Lo 0 ric M Ea sy 50 Af C AB 250 Credit Registry Access as at 2 September 2017 195 194 150 100 0

d re oc icr . . . 15 vt ) (P an in of icr M 4 M n s. S. . . es Bu sin 1 Lio n t. . . ta ve s In pi Ca . 105 Le o n am or st re c. . an Fin 500 450 400 350 300 250 200 150 100 50 0 Kr e rc te In ks uc tb Ge Credit Registry Access as at 2 September 2017 466 2

700 663 Credit Registry Access as at 2 September 2017 600 500 400 299 300 200 109 100 0 0 Microhub Financial Services (Private) Limited Microplan Financial Services (Pvt) Ltd Solten Financial Services (Private) Limited 15 9 Success Transport & Untu Microfinance Equipment Microfinance Bank Finance (Pvt) Ltd

Credit Registry Access as at 2 September 2017 11 12 10 8 5 6 5 4 2 0 0 Wisrod Yambukai Ziada Capital Zibuko Capital Investments Finance (Pvt) Microfinance (Pvt) Ltd Ltd (Private) Limited 2 Zimnat Financial Services (Private) Limited

COLLATERAL REGISTRY

Establishment of Collateral Registry The Reserve Bank has started the process to establish a collateral registry. Collateral registry is primarily a database of movable assets taken by lending institutions as security. The collateral registry allows the use of movable collateral, enabling borrowers leverage their movable assets to obtain credit.

Collateral Registry Legislation • Movable Property Security Interests Act [Chapter 14: 35] covers the following, among other provisions: • Creation of security interests • Registration of notices • Priority of security interests • Rights and obligations of the parties • Enforcement of security interests

Features of the Collateral Registry Centralized Registry – Single data source for all movable collateral Web Based System Accessible 24/7 Low registration fees to cover the cost of operation Notice Based System, Limited Information, No Documents Searches by identifiers of debtors and serial numbers

Value & Benefits of Collateral Registry INCREASES ACCESS TO CREDIT COST SAVINGS (INSURANCE & STORAGE COSTS) REDUCES THE COST OF CREDIT BETTER USE OF CAPITAL

Collateral Registry Implementation Activities • The Reserve Bank has an implementation plan which includes following activities: • Development of Collateral Registry Regulations. • Procurement and Deployment of Collateral Registry Software. • Training of banking institutions, MFIs and key stakeholders. • Consumer Awareness.