Zimbabwe Situation Essays

Submitted By Nobert1984
Words: 2229
Pages: 9
Open Document
WEEKLY TRENDS 07 DECEMBER 2012

Investment Research

22 Arundel Road Alexandra Park Harare Tel: +263 4 783 069-71 research@mmccapital.co.zw www.mmccapitalzim.com

WEEKLY TRENDS 7 December 2012 FINANCIAL 1. CREDIT BUREAU TO DEEPEN ZIMBABWE FINANCIAL MARKETS MARKETS

and thus does not need to pay the full cost of a damage. • McKinsey and Company, 2009 says that the beneficial effects of the presence of credit bureaus on lending especially to small and medium-sized businesses (SMEs) and corporate lending are

The need to improve the functionality and stability of the financial systems and condensing non-performing assets especially loans while improving credit grantors' portfolio quality has compelled many governments to establish credit bureaus. Countries with credit bureaus in Africa include South Africa, Botswana, Uganda, Rwanda and Egypt. In Zimbabwe, the banking act is in the process of being amended for the establishment of a credit bureau. A credit bureau is an institution that collects information from various sources and provides consumer credit information on individual consumers for a variety of uses. It is an organization providing information on individuals' borrowing and bill-paying habits. Credit information such as a person’s previous loan performance is a powerful tool to predict his future behavior.

attested to in several studies such as Mylenko, 2003 and Jappelli & Pangano, 1999. These investigations concluded that 27% of SMEs report financial constraints in markets with credit bureaus compared to 49% in markets without credit bureaus. There is also a 40% probability of granting a loan in markets with credit bureaus compared to 28% in markets without credit bureaus. • Credit bureaus can effectively reduce default ratios through a set of combined effects. Visible credit histories permit the appropriate lending activity. Where potential borrowers are overextended

(existing debt and repayment difficulties), lenders 1.1 Impact of Credit Bureaus to Financial Markets • Credit bureaus reduce the consequence of can avoid clients that may be unable to repay. Credit bureaus work as enforcement tools, pushing clients to repay their debt in order to avoid being included in the list of bad debtors. These credit information institutions will also help in reducing fraud by providing positive identity checks.

asymmetric information between borrowers and lenders, and alleviate problems of adverse selection and moral hazard thus increasing access to credit. Adverse selection occurs when the seller values the good more highly than the buyer, because the seller has a better understanding of the value of the good. Due to this asymmetry of information, the seller is unwilling to part with the good for any price lower than the value the seller knows it has. On the other hand, the buyer, who is not sure of the value of good, is unwilling to pay more than the expected value of the good, which takes into account the possibility of getting a bad price. This prevents the transaction from occurring.

According to McIntosh et all, 2006, credit bureau use has a large and positive impact on loan performance. In America in the Micro finance business, the use of credit bureaus in selecting new clients resulted in the decrease in the average percentage of individual loans with at least one late payment decreased from 67.2%( pre-credit bureau period) to 52.8%. This decrease in arrears indicated the efficiency gains for the Micro Finance

Institutions. Non-Performing Loans (NPL) ratios Moral hazard is seen for services such as insurance and warranties. In these cases, after the deal is done, one of the parties to the deal (in this case, the person purchasing the insurance or warranty) may be more careless because he/she has the insurance, MMC Capital Investment Research 2 were reduced from 6.67% to 4.52% in banks in Shanghai at the end of 2002, one year after launch of the local credit bureau. Arrears rates declined by 2%
Show More

Related Documents: Zimbabwe Situation Essays

Zimbabbape In The Post Of UK Diplomacy Policy

WHAT SHOULD WE DO ABOUT ROBERT MUGABE? EVALUATE ZIMBABWE IN THE CONTEXT OF UK SECURITY POLICY. BRIEF HISTORY 1890 – PRESENT 1. In 1890, British imperialist and colonizer Cecil Rhodes (1890 – 1902)1 and his British South Africa Company (BSAC) conquered a large portion of Southern Africa and had the region named after himself. Northern Rhodesia (modern Zambia) and Southern Rhodesia (modern Zimbabwe) came under British control. In 1923, after a referendum which rejected union with South…

Words 2409 - Pages 10

Zimbabwean: Zimbabwe and politically Correct Zimbabwe Essay

Politically correct


 Zimbabwe, formerly Rhodesia, is now the country of Records: 
-1.8 million out of the 12.3 millions of the inhabitants, which is the 15.6% of the entire population, is affected by HIV / AIDS syndrome, that means that in the country there is the lowest life expectancy in the world. In facts, according to the WHO, the average life expectancy for men is 37 years, while for women is 34. The average age is 19 years; -Zimbabwe is the country with the most dramatic increase…

Words 1537 - Pages 7

Caitlin's I Will Always Write Back

Question 11: What incident, problem, conflict, or situation does the author use to get the story started? Discuss a particular event in the story that used foreshadowing or flashbacks. In Mrs. Miller’s seventh grade English class, Caitlin is asked to pick a country for the pen pal project. Caitlin after browsing the countries determines that she should send her letter to Zimbabwe; the name was very intriguing and exotic which is why she chooses this country. Through the pen pal program Caitlin meets…

Words 439 - Pages 2

How Did Imperialism Affect Zimbabwe

everything you have grown to know and love taken away from you. This happened when imperialism occurred in Africa in the 1800s and 1900s. Zimbabwe was a location that was greatly impacted by the process of imperialism. Overall, imperialism brought many positive and negative effects to Zimbabwe as well as other places around the world. The impact of imperialism in Zimbabwe had a negative effect overall because the continent was divided without regard to the groups the Africans had formed, the government…

Words 1084 - Pages 5

Mugabe: Robert Mugabe and Zimbabwe African National Essay examples

[muɡaɓe],[needs tone] English: /muːˈɡɑːbiː/ moo-gah-bee; born 21 February 1924) is the President of Zimbabwe. As one of the leaders of the guerrilla movements against white-minority rule, he was elected into power in 1980. He served as Prime Minister from 1980 to 1987, and as the first executive head of state since 1987.[1] Mugabe rose to prominence in the 1960s as the Secretary General of the Zimbabwe African National Union (ZANU) during the conflict against the white-minority rule government of Ian…

Words 472 - Pages 2

Bob Marley Accomplishments

Bob Marley had many great accomplishments in his life time, a few being a Jamaican singer, musician and songwriter from the so called “Third world.’. Nesta Marley served as a world ambassador for reggae music, making him the first music ambassador of Jamaica. Marley earned induction into the Rock and Roll Hall of Fame in 1994. He sold more than twenty million records, making Marley the first international superstar to emerge from the “Third World’. In 1976, he released an album “Rastaman Vibration”…

Words 401 - Pages 2

Essay on Politics: Health Care

Journal of Social Development in Africa (1990), 5,1, 5-22 Equity in Health: Zimbabwe Nine Years On. DAVID SANDERS+ ABSTRACT This paper summarises Zimbabwe's legacy in both health (or disease) and health services. It then examines the changes in the economic environment which have taken place in Zimbabwe since independence in April 1980, concentrating on those which are relevant toilealth. It also describes the post independence restructuring of the health sector itself. Access to health care and…

Words 8960 - Pages 36

Book Review: The Warmth Of Other Suns

everything they do. The author suggests that, "The table seemed set before Pershing was even born, and he couldn't see how to stand out on his own or figure out how he fit in as the youngest.”(Wilkerson, 75). I relate to Pershing, when I was growing up in Zimbabwe, I was under a lot of pressure from my family to be the best at everything, and to follow a life plan that they had created for me. The text evoked feelings of sadness in me as it took me back to a time I had no say in the decisions made about my…

Words 1343 - Pages 6

The Stanford Prison Experiment: The Lucifer Effect

to prison situations), prisoners can only "respond" — this "response" can only be influenced by two options : Resistance or obedience. The former, brought the punishment; the latter led to the loss of autonomy and dignity. On the third day of the experiment, the "criminals" who began to believe that guards often said to them that they were really inferior and could not change the status (Zimbardo, 2000). In the "Stanford prison experiment", Dr. Zimbabwe witnessed a shocking situation: in a certain…

Words 347 - Pages 2

Poverty: United States and totally Different Level Essay

being in poverty. Feeling poor in the United States is different from living in poverty in Russia or Zimbabwe. Being poor in the United States are just making it from day to day. You can have a job and have income coming in every two weeks and still can be label as “poor”. This may be due to choice of career, hard times, or other circumstances. They may or may not be able to pull out of their situation. However, they are as likely as those earning higher incomes to strive for the future, to hope for…

Words 394 - Pages 2