On 12th September, 2012, the Competition and Fair Trading Commission received a complaint from Credit Data Limited which runs a Credit Reference Bureau (CRB) against the Bankers Association of Malawi (BAM). The complaint alleged that the association had instructed its members not to deal with any other credit reference bureau other than CRB Africa Ltd through non provision of account holders’ data to Credit Data Limited, information which is vital for operation of credit referencing business.
Following investigations, the Commission established that CRB Africa, as the first entrant in the market, had initial agreement with BAM, an arrangement that was dictated by the situation surrounding its entry in Malawi. The Commission however, did not establish any evidence that showed that BAM instructed its members not to deal with any other credit reference bureau.
However, the Commission found that the identification of CRB Africa and the Agreement had the effect of lessening competition in the provision of credit reference services. The Agreement also denied the Complainant an opportunity to develop necessary infrastructure (database) to participate in credit referencing business and created an artificial monopolistic environment.
The Commission determined that, while the conduct by members of BAM created an anti-competitive business environment in credit referencing, the absence of appropriate enabling legislative decree to safeguard credit data holders from liability for breach of confidentiality rights of customers was a major stumbling block to creation of a competitive business environment for credit referencing in Malawi.
The case was therefore referred to Reserve Bank, the sector regulator, particularly on the need for the Bank to establish appropriate regulations to level the playing field for credit referencing business by, among other things, ensuring effective implementation of section 13(3) (a) of the Credit Reference Bureau Act, and creating a competitive environment for CRB’s to thrive.