BOZ LAYS OUT BORROWING TERMS

with favourable conditions can be accessed by borrowers with a positive credit report which shows their muscle to meet financial obligations, says Bank of Zambia (BoZ) Senior Analyst-Research and Regulatory Policy, Banji Milambo.

A credit history is a record of a borrower's responsible repayment of debts.

Mr Milambo said borrowers with a positive history of loan repayments were likely to access funds with favourable conditions.

He explained yesterday in Lusaka during a BoZ radio show that it was therefore important for borrowers to have a positive credit report.

“Lenders use the report in assessing whether to give you a loan and what conditions should apply. If you are seen to be a little bit risky, then probably the interest rate will be a little bit higher and the conditions will be stiffer.

“If you are seen to have a good story to tell in terms of credit history, then the conditions might be more favourable,” Mr Milambo said.

A good report, he stressed, was important particularly when borrowers wanted to obtain credit as it showed the financial health or behaviour of the borrower.

Mr Milambo explained that a credit report showed the details of the money which had been borrowed, repaid or repaying.

“The most effective ways that have been used to see if a person is likely to honour their obligations is to look at their history.

“The way that a borrower has behaved in the past is an indication of the way they will be honouring their obligations in the future,” Mr Milambo said.

Mr Milambo encouraged borrowers to access their credit report from relevant organisations.

He explained that bowers were allowed by the law to access their credit report once in a year.

“Every person should access their credit report because every person has the right to know whether the details in the system is correct or not.

“A lender wants to know if you are able to meet you obligations and according to how you have agreed,” Mr Milambo said.

The information about a prospective borrower’s standing could be accessed from the Credit Reference Bureau, trading as Trans-Union.