NAIROBI, Kenya, Sep 14 – Microfinance Institutions (MFIs) in the country will soon start accessing their customers’ data at the Credit Reference Bureau while processing loan applications.
Kenya Bankers Association Chief Executive Officer Habil Olaka said the association and the Central Bank of Kenya are currently working on regulations to manage the process.
“We started first with negative information sharing and then positive information sharing which is what we call full file reporting and that was initially with banks only. After we fully achieve this with the banks, we will now move to the comprehensive reporting where we will have other credit providers,” said Olaka.
He said the information sharing will move to MFIs before it is rolled out to Saccos.
“We will start with the microfinance because most of them are operating just like banks where they even give credit and even take deposits. So it’s quite easy to bring them on board, then we will go to the Saccos and other credit providers,” Olaka added.
In the recent past, MFIs have argued that lack of access to the bureau puts them at a disadvantage by exposing them to the risk of lending to individuals and businesses that have previously defaulted on their loans.
Olaka however said that commercial banks are willing to share credit information with MFIs if the regulation is amended to allow this.
“I know changing regulations and laws can take even years, but we are working with the Central Bank to ensure that all are on board. In fact, we have already started engaging the institutions on this issue, “he said.