Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Kenyan banks share credit details

NAIROBI, Kenya Aug 12- The Kenya Bankers Association (KBA) has reported impressive compliance by commercial banks in the implementation of customer credit information sharing.

The exercise, which kicked off officially at the end of July, requires banks to submit information on customers’ loans to the Credit Reference Bureau for the formulation of individual credit reports.

KBA Credit Information Sharing Initiative Project Manager Jared Getenga said on Thursday that the response highlighted banks’ willingness to ensure the cost of credit comes down in the country.

“The reports that we are getting is that banks by and large have met the deadline. I think that has been because there have been concerted efforts by them to put together the data,” Mr Getenga said.

The Central Bank is expected to release an official update on the exercise in the coming days.

Financial institutions are required to submit monthly updates by the tenth day of each month, following the enactment of the Banking (Credit Reference Bureau) Regulations 2008, in February and the subsequent licensing of the first credit reference bureau, CRB Africa.

KBA Executive Director John Wanyela said the credit reports would help solve the existing information asymmetry between banks and borrowers that has been said to constrain access to credit.

CBK has awarded an interim license to Metropol East Africa making it the country’s second credit reference bureau and is currently processing applications from Compuscan and Credit Check.

Mr Wanyela said this would speed up the sharing of credit information within the banking sector cutting down the transaction time for securing loans.

Banks are expected to use this information to price loans based on a borrower’s risk profile thus easily isolating serial loan defaulters.

Advertisement. Scroll to continue reading.

On the other hand, borrowers particularly those in the Small and Medium Enterprise Sector, will find it easier to access credit as the information will act as ‘personal collateral’ when applying for loans.

The banking industry has been challenged with high rates of bad debts as a result of poor lending practices, but access to individual credit histories is expected to curtail the practice.

Credit Reference Bureau Africa Chief Executive Officer Wachira Ndege however said more work has to be done to synergise bank-reporting platforms.

“We are dealing with many institutions with different systems. There are also data fields for customers that are missing that the banks now have to go back and fill,” Mr Ndege said.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...