NAIROBI, Kenya – It is not factual that 15 Million Kenyans are listed with a negative status in the Credit Reference Bureau (CRB), a firm that collects information from financial institutions and provides consumer credit information on individual consumers.
On 24th September 2022, President William Ruto during an interview with Al Jazeera said that there are 15 million Kenyans listed in the data by three firms accredited to hold the information.
“Next week, we are going to rework the whole credit rating system. The current one is an all-or-nothing system; you’re either listed as a defaulter or not. There are some 15 million people listed in the CRB. We’ll keep the credit reference bureaus, but change the scoring mechanism so that it’s not all-or-nothing,” Ruto said in the TV interview.
In Kenya, there are three CRB firms which include Metropol, TransUnion and Credit Info.
September 2022 data from the three firms show that 19 million Kenyans are on the borrowers list. The 19 million Kenyans is inclusive of those who have a positive and a negative borrowing history.
Positive status identifies loans that are being serviced while loan repayment is consistent. Negative identifies defaulted loans.
According to Metropol Corporation Managing Director Sammy Omukoko, out of the 19 million Kenyans who are in the CRB list, 6.1 million have a negative status after defaulting on them.
“Our CRB services leverage full-file credit information sharing and alternative data sources from MFIs, SACCOs, HELB, Utilities, Mobile phone companies, and providers of goods and services on credit to help customers improve their access to finance and increase the credit providers’ capacity to lend profitably to more customers,” a statement posted at the organization’s website reads in part.
On September 29, President Ruto went further to pledge that more than 4 million loan defaulters will be removed from CRB defaulters list in the ongoing reforms of Credit Information Sharing (CIS).
“I am very happy that between 4 and 5 million Kenyans will by the beginning of November be out of blacklisting,” said the head of state.
“That is very important because they have been excluded from any formal borrowing because of black listing and have been left at the mercy of shylocks and predatory lenders that exploit them and many Kenyans pay as much as 1000 percent,” he added.
However, with 6.1 million Kenyans having a negative credit history it therefore means that banks will need to formulate a criteria on who will be removed from the list.
Banking (CRB Regulations) 2020 provide that every credit bureau must develop a credit score for each borrower whose credit information has been submitted.
The regulation however, directs that the credit reports should not be used by financial institutions to blacklist customers when it comes to accessing the loans.
The data from CRB agencies is aimed at informing decision-making process when determining an application for credit.
However, the current situation portends that anyone listed on CRB is barred from formal borrowing.
During his campaigns ahead of the August election, President Ruto had pledged to review credit listing to open up access to credit for people barred from borrowing over the negative listing.
Ruto said that he supports CRB as a method of instilling financial discipline among borrowers but must not criminalise customers.
The Head of State, however, proposed changing the credit scoring mechanism to give everybody a chance to access credit.
