A loan applicant’s rude awakening
* The credit data reporting is aimed at making people to stay current with their loan repayments and to deter defaults
* Commonly done by unscrupulous individuals, who get the money but immediately close their accounts after shifting to another bank
* With credit data reporting, this behaviour has been curtailed to inculcate a culture of honesty, integrity and sound financial management in maintaining a good credit history
By Duncan Mlanjira
Every credit one takes — even through TNM Mpamba Ndikankhe or Airtel Money Kutchova Loan — is getting into the system of credit data reporting and when in default, even for K1,000, it is indicated once an individual applies for a loan with commercial banks.
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This also covers loan applications through National Economic Empowerment Fund (NEEF) — as attested to by a loan applicant at NEEF that the loan he took over five years of K500,000, and was not being deducted, showed he was in default and had accumulated penalties and interest up to K1.3 million.
Another person was found to be in default with a TNM Mpamba Ndikankhe and the bank he wanted to access a loan from showed him the credit data history that he had taken a few days before — but though he was within the grace period of repayment with TNM — his application was rejected.
The credit data reporting is aimed at making people to stay current with their loan repayments and to deter defaults commonly done by unscrupulous individuals, who get the money but immediately close their accounts after shifting to another bank.
With credit data reporting, this behaviour has been curtailed to inculcate a culture of honesty, integrity and sound financial management in maintaining a good credit history.
The credit data reporting has been enhanced by the Reserve Bank of Malawi (RBM) in its campaign for the business fraternity to utilise movable asset-based lending, which is becoming a practical tool for unlocking capital where traditional collateral, like land or buildings, may not be available.
Reserve Bank of Malawi
Credit reporting is being carried out by Credit Data CRB — an RBM regulated institution which is required to abide by the Credit Reference Bureau Act 2010 and the amendment of 2015.
At a recent engagement the the RBM had in its campaign for to sensitise the option of utilising movable asset-based lending credit officer for Credit Data CRB, Alfred Mtila said credit report provides information that is very important in finances and getting loans because it speaks of the credibility of the borrower.
He indicated that since January up to the first quarter of 2025, Credit Data CRB registered high numbers of people seeking credit reports.
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Situated on the Ground floor of Umoyo House, along Victoria Avenue in Blantyre, Credit Data CRB is a Malawian-owned company with a strong understanding of the local market — collecting data which assist in giving out credit histories of clients on behalf of lending institutions as well as for individuals requests.
To fulfil this mission, Credit Data CRB was licensed by the Reserve Bank of Malawi in November 2011 having successfully satisfied the application requirements.
According to Credit Data CRB website, the data is collected from lending institutions licensed by the RBM but also collects credit data from any institution that transact on credit as they carry their businesses.
“Since our licensing we have been collecting data from bank, microfinance, insurance, cooperatives, utility institutions, government agencies, and traders,” says the institution on its website; https://www.creditdatamw.com/index.html
The institution was incorporated as Credit Data Reference and Debt Management Limited on March 17, 2005 under the Companies Act, 1984 and later evolved to become Credit Data CRB Limited — under a special resolution and with the authority of the Minister on November 19, 2010.
“The evolution was necessary to reflect the renewed focus and strategic drive to become a fully-fledged credit reference and move away from debt management which was the main function.
“The business was established with the mission of sealing the credit information gap that exists in the country between credit providers and their existing and potential clients.
“As a credit reference bureau, our mandate is to collect and store credit histories on individuals and institutions. Lenders, including banks, micro-finances and other financial service providers, share credit information about their customers with us
“We also source information from other pertinent places like the courts, utility providers, city councils. The information we receive is used to create a credit reference report.
“Lenders use credit reference reports to help them decide whether to approve an application or not. We do not give lenders an opinion about whether one should get credit or not, we simply provide information about contact details, and details of credit commitments which forms credit history.”
Credit Data CRB assures the business community and the public at large that they “do not exist to make lives difficult — on the contrary, our reports enhance chances of getting credit at times, it also helps the lenders to make realistic and manageable credit risks”.
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“Our customers are generally commercial organisations and government bodies that transacts on credit. Only institutions that transact on credit are allowed to deal with our bureau.
In partnership with the International Finance Corporation (IFC), the RBM is implementing the financial literacy campaign on credit reporting and movable asset-based lending in collaboration with key financial sector stakeholders like banks.
The campaign is going alongside sensitisation on credit reporting and collateral registry — credit reporting being noted that it has become clear there is still a significant knowledge gap when it comes to credit reporting and how it affects access to finance.
The collateral registry — Personal Property Security Registry (PPSR) through Department of the Registrar General — is a powerful fully-automated online mechanism for increasing access to credit, especially for small businesses.
The collateral registry and movable asset-based lending (MABL) unlocks broader access to credit for individuals and micro, small & medium enterprises (MSMEs).
The moveable assets includes livestock/seeds/agricultural machinery; comperehensively insured motor vehicles and computers; and accounts receivables (unpaid invoices/payments due from customers), among others as collateral to access credit.
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The Department of the Registrar General’s PPSR in the evolving financial ecosystem involves providing transparency to other potential creditors, preventing multiple claims on the same movable assets.
It enables borrowers to register their movable assets, which lenders can then verify quickly and securely — while increased usage of the registry will ultimately support a stronger, more inclusive credit market.
Also present at the media engagement TransUnion Malawi, whose country manager, Dumisani Kadango said they have noted a marked shift in consumer behaviour, saying in the first quarter of 2025 alone, there was a noticeable 35% increase in CRB requests — demonstrating an increase in the number of Malawians requesting their credit reports and querying the information therein.
“This is a clear indication that more people are beginning to understand the value of maintaining a good credit history and the role it plays in accessing finance,” he said, taking note that Malawian banks are increasingly offering innovative lending solutions tailored for MSMEs.
Through the campaign, the RBM empowered consumers with knowledge about their credit rights and the financing opportunities available to them, while encouraging greater trust and engagement with Malawi’s financial infrastructure.
