JACK ZIMBA
Lusaka

A FINANCIAL expert says credit rating agencies play a crucial role in shaping the country’s economy, attracting investors, and ensuring transparency in financial markets.
Recently, the Securities and Exchange Commission (SEC) accredited and approved ICRA Rating Agency Limited to operate as a credit rating agency in Zambia.
ICRA country director David Mwambazi said the emergence of the agency on the Zambian financial market will have a positive impact.
Mr Mwambazi said assessing the creditworthiness of various institutions has many benefits to the economy, such as enhancing investor confidence and promoting responsible borrowing and lending.
“The agency will provide investors with reliable information by evaluating the credit risk of entities such insurance companies, banks, microfins or private companies.
This transparency will boost investor confidence and encourage more capital inflow,” he said.
Mr Mwambazi said having credit rating reports in the financial ecosystem is important, especially in Zambia where the banking sector is evolving and expanding.
“These reports are valuable tools for banks, investors, and other stakeholders as they provide an independent assessment of borrowers’ creditworthiness. This assessment is crucial for making well-informed lending decisions,” he said.
He also said the credibility, comprehensive analysis, and global expertise offered by ICRA Rating empower banks to optimise their operations, attract investments, and significantly contribute to the stability and growth of the financial system.
Mr Mwambazi said benefits to commercial banks include risk assessment and management, regulatory compliance and capital allocation.
“Effective capital allocation is crucial for banks to maximise profitability while minimising risk. Credit rating reports guide banks in allocating capital efficiently by identifying highrisk and low-risk borrowers, thereby optimising their loan portfolios,” he said.
He said with a credit rating, banks, insurance companies, and other financial institutions will also undergo scrutiny, as the agency’s evaluations will highlight their stability and risk profiles.
“The establishment of this new credit rating agency represents a significant milestone for Zambia. As we move forward, let us embrace transparency, accountability, and sound financial practices.
Together we can build a stronger, more resilient economy that attracts global investors and benefits all our citizens,” he said.
Mr Mwambazi said ICRA Rating is a highly respected independent international credit rating agency with a global presence.
The agency also holds accreditations from various central banks and is licensed by different security exchange commissions..https://enews.daily-mail.co.zm/