An initiative by one of the World Bank Group’s member, International Finance Corporation (IFC), in partnership with the Reserve Bank of Malawi (RBM) has intensified a campaign for financial literacy in Malawi, sensitizing citizens about credit and loan facilities.
A statement on the initiative that was launched in Blantyre in January this year acknowledges gaps in the public’s awareness on financial services like credit reference, asset based lending, among others.
“While many Malawian consumers are aware of credit and loan facilities, far fewer understand how the management of these facilities affects their financial health,” the statement reads.
The statement, released this week, further says access to credit aims to assist consumers and Micro, Small and Medium Enterprises (MSMEs) in achieving their long-term financial goals.
“That’s why the first step on the journey to financial health starts with regularly checking and understanding your credit report,” it further reads.
Recently, the IFC acknowledged Malawi’s strides in credit referencing with the proliferation of credit reference bureaux and their mandatory role in the financial sector.
However, the campaign still aims to lure more Malawians into utilisation of credit reference services to help them maintain clean credit records and utilize their healthy records for access to finance that helps them grow their businesses and contribute more to the economy of Malawi.
“A credit report is one of the most powerful financial tools available to consumers. It tells you the state of your financial background, your personal payment history, and your creditworthiness. It can also help you protect yourself against identity theft and fraud. To get the full benefit from a credit report, you have to know how to use it to your advantage,” the statement reads.
With other people unaware of credit reference system, reckless loan defaults and failure to guard clean credit records occur while their records are being sent to credit reference bureaus.
Banks, micro finance institutions and telecommunication companies are some of the major players in the financial services and often get information about their customers financial transactions, building patterns of financial behaviour that show creditworthiness.
