Centralised Credit Database in Zimbabwe

Being in the new Information Age, the power of information can never be underestimated because uninformed deci- sions can cost you both time and money. Looking at the Zimbabwean economy at the moment; there have been cries from all sectors for a credit rating system in the country. In a recent  blog issue by Page Properties, the author lamented on the lack of a reliable credit rating system in the country; “Without a reliable credit rating system and central database of bad tenants, agents are forced to rely upon the word of the applicant and the references the applicant gives.” As we all know, no potential tenant, employee or debtor would willingly provide references who will not give a favourable report of their past behaviour.

The very survival of a credit provider, landlord or real estate agent depends on its ability to collect and process infor- mation efficiently, in screening applicants, and in monitoring their performance. Against that background, there have been calls in the local credit market for the establishment of a robust credit reference bureau that includes demographic data, positive and negative credit information, payment history, and credit performance among other data. Issues such as high rentals or a shortage of rental property can be explained by the fact that the risks associated with renting out property with no safety systems are too high. In line with that, property owners are then forced to charge premium rentals on their property to accommodate for non-payment of the rent at some stage during the lease or for the lack of proper maintenance of the property.

A centralised database would make it easier for property owners to access clients’ information that would help them detect high risk clients before issuing out a lease to them. In Zimbabwe, a judicial system and Rent Board biased towards the tenant makes it difficult for agents and landlords to evict bad tenants once they have already signed them on. In this regard, it becomes even more important for landlords and agents to ensure they sign on a paying tenant. The adage ‘prevention is better than cure’ in this regard has never been more true.

In response to that market need, Expert Decision Systems (XDS) established a credit reference bureau in Zimbabwe that enables credit providers across different sectors to access consumer reports and analytics on demand. For the past three years, the company provides credit risk management solutions and specialised credit management analytics that meet the calls for a comprehensive credit information system. The coming in of XDS into the Zimbabwean credit market at this stage of the credit cycle is also in line with IMF and World Bank recommendations to have the existence of strong credit information as a prerequisite of a well-functioning credit market.


The credit market in Zimbabwe is fast becoming more com-
plex to manage risk effectively. The lack of information on
the behaviour and exposure of clients increases the risk of
financial losses. In a recent article published in The Herald,
Ms Rumbidzayi Zinyuke, reported that the Estate Agents
Council of Zimbabwe has indicated an increase in the default
rate in the property sector which is now at about 55%; this is
a far cry from the normal rates of between 10 and 20%. It
was reported that this large default rate can be attributed to
‘economic challenges.’ The Chairman of the Estate Agents
Council, Mr Oswald Nyakunika was quoted as saying that the
default rate is actually expected to continue to rise and this will have negative impact on property values. Properties attached due to failure of honouring debts are being auctioned for less than their market value and this presents a large loss to property owners and property managers in the sector.

XDS Zimbabwe is therefore bridging this gap and it would be of great benefit for all real estate agents to access this service. We provide accurate and timely information to estate agents and property managers in order to facilitate improved customer management decisions. This helps to establish a well-functioning real estate sector with low rates of default and property evictions which have also been increasing along with the rise in default rates.

The XDS database covers a multitude of sectors from finance to retail, as well as real estate. To date XDS has estab- lished a functioning bureau servicing microfinance institutions, credit retailers in furniture, clothing, insurance compa- nies, registered real estate agents and other credit grantors in manufacturing and agro processing. The bureau is in- viting all other real estate agents which are currently un-serviced in the market to be a part of the XDS system.

The industry and national importance for such an initiative are numerous. For starters, the XDS credit information system now facilitates information sharing amongst real estate agents and property owners allowing large volume access to consumer data without compromising data security. Also of importance is that it helps protect consumers from inadvertently becoming over indebted and it protects landlords and other property owners from financial loss arising from bad debts.

Some of the other benefits of being a member of the bureau are that:

  • ?  Users can access clear reports on customers’ credit activities across all sectors

  • ?  Agents can make affordability calculations on potential customers

  • ?  The reports can be part of your organisation’s collection strategy as non-paying tenants will not be able to access

    property or credit from other providers until they have met their prior obligations.

  • ?  Property owners and real estate agents can protect their good tenants from becoming over borrowed

  • ?  Real time enquiries procedure and faster processing times of applications

  • ?  An audit trail of the vetting process as the reports can be printed

  • ?  Up-to-date current credit information: both positive and negative.