DAB championed the establishment and implementation of the PCR system to enable transparency and efficiency in the credit granting process and to foster financial system stability. It was launched to tackle the challenges of credit allocation facing banks and other small financial institutions. The World Bank Group’s International Development Association (IDA) and International Financial Corporation (IFC) provided extensive support to DAB on the deployment and implementation of the system, with co-financing from Harakat.
“The PCR is an advanced credit system that is currently available in Afghanistan, and does not as yet exist in many neighboring countries,” points out Nesar Yosufzai, Director General, Public Credit Registry at DAB.
The PCR system became fully operational in 2014 and is now utilized by all commercial banks and two microfinance institutions. According to Yosufzai, more than 108,000 contracts were registered in the PCR system, as of May 2015.
Through the PCR system, bank customers benefit from a faster credit process as well as a better understanding of their finances. “With the implementation of the PCR, bank customers are able to obtain free annual credit reports, enabling them to better understand their financial position,” says Yosufzai.
System meets customer needs
Dr. Shahid Niazi, director of Zarafshan Construction Company, is an active customer of Azizi Bank and had taken a loan worth $1 million to implement a project contract with the municipality. “Before installation of the PCR system, obtaining loans from banks would take two to three months while now it takes only 7 to 10 days,” he says.
Dr. Niazi has been able to obtain a bank loan three times. Whereas previously he would sometimes fall behind in his work schedule due to the lengthy time required for loan approval and processing, this is now no longer a problem.
The PCR system has not only increased customer confidence but also bank confidence in the credit process. Maiwand Azizi Hotak, Deputy Director of Credits and Loans at Azizi Bank, says: “All the contracts have been registered in the PCR system, which has proven to be effective in ensuring loan safety, customer identification, and security of their properties. The system is active 24/7 and accessible through Internet. It has established a high degree of trust among banks and microfinance institutions.”