By Correspondent
Ratepayers who owe money to city councils may soon fail to access credit lines from banks if a partnership between Councils and the Financial Clearing Bureau (FCB) passes.
This follows decisions by Masvingo, Harare and Kwekwe councils to enter into partnership with the FCB, a company which offers credit clearing services and vetting.
According to minutes of the Masvingo Finance and General Purpose Committee, the partnership between the council and FCB is expected to accelerate debt collection.
“Debtors, who would want to borrow from banks or other financial services providers will be required to first settle outstanding bills with their local authority.
“FCB is a private limited company offering credit clearing services and vetting.
“It collects credit data from several entities that provide credit to the public and issue a credit clearance certificate showing that the prospective borrower has a clean record”.
The partnership between FCB and the councils will ensure that debtors that want to borrow are required to clear their council bills first.
“After that FCB will then issue out a credit clearance certificate to the debtor after settlement of the debt for a small fee.”
Meanwhile, the Committee noted with concern the increasing institutional debt and the need to engage various Government departments to settle it.
Masvingo is owed in excess of ZWL$3.2 billion by rate payers and has been pressuring residents to pay up.