Malawi’s credit journey

As Malawi is celebrating 50 years of independence; we at Credit Data CRB are celebrating 10 years of being part of the Malawi’s credit industry.

This celebration marks a milestone in a journey that one would be tempted to find a religious parallel. It is a story and a journey of so near and yet far way. Yet we stand here feeling stronger; as they say what does not kill you can only make you stronger.

The story of Credit Data is one that many have been familiar with. It is a typical Malawian story—one that has followed a sad trend in our business culture but as sad and as tough as the journey has been we stand here today with pride and great conscience that we have arrived despite facing many challenges.

No matter how tough the journey is, the real joy is arriving or seeing your destination in sight.

There are many good tales we could tell and perhaps form a forum from which lessons for the future could be shared to ensure that we help our entrepreneurs thrive and be aware the risk of venturing into new territories.

But as the saying goes: ‘a journey of a thousand miles must begin with one step’.

Malawian business captains and the financial industry have been wishing for a credit reference bureau such that the expectation was that when the day comes on the ground there would be celebration.

The passing of the Credit Bureau Act in Parliament in 2010 was expected to bring credit hope to the credit hopeless. The passing of the Act was followed by the regulator licensing two credit bureaus.

Credit Data CRB Ltd was licensed by the Reserve Bank of Malawi in November 2011.

Optimistically and excitedly we, naively, believed that Malawians would also be proud that an indigenous company had made it. Unfortunately our expectations and the realities on the ground were two totally different things.

The Malawian credit journey took off with animosity and the route of this important and needed service almost changed.

Some players in the industry have changed the picture of a Credit Bureau from a needed service to an enemy service by ranking credit bureaus as blacklisting agencies which would go all over town telling the bad credit story—deliberately sweeping under the carpet that for a bureau to release information the owner has to give consent to the user.

The other problem became the reluctance of data providers or potential data providers to provide data.

Despite all these problems Credit Data CRB has wishes. Wishes that one day, because of it being on the ground, a Malawian business shall be able to make more sales because of the confidence to sell on credit, produce more because its products are being sold in huge quantities on credit, recover over its debts, pay more tax because of improved sales and increase its workforce because of increased production. Perhaps improved service delivery by government due to high tax income.

Our dream is that a Malawian citizen shall have improved access to finance because of a good credit history which will enable him or her to send a child to a good school with enough groceries and pay school fees on time.

A Malawian citizen will be able to build/purchase a good house within a reasonable time with an affordable credit, go on a holiday with family and boost the tourism; supporting government’s initiatives.

A Malawian citizen will be able to purchase agricultural inputs which shall lead to enhanced food and crop production, avoid stealing cash because of the need to live a good life. Most importantly, perhaps, leave a legacy because of a life well lived all because of the benefit of having a good credit history record.

It is our belief that these wishes shall one day be fulfilled as Credit Data CRB still continues to be part of the Malawian credit journey.

As they say, where there is a will there shall be a way.

The author is a Managing Director of Credit Data