The Sacco Societies (Amendment) Bill, 2018
The Sacco Societies (Amendment) Bill, 2018 was gazetted on 19th January 2018 for placement before the National Assembly. The objective of this Bill is to amend the Sacco Societies Act, 2008, to provide for the registration and licensing of Sacco societies as deposit-taking savings and credit co-operatives. The Bill further expands the current credit information sharing mechanism to include Sacco societies with other licensed financial institutions. This is intended to align the Act with the Banking Act, the Microfinance Act, 2008, thus bringing credit information sharing under a single regulatory framework. Under the proposed amendment, Sacco societies will be mandated to …
CBK Governor Speech at AKCP 5 Year Strategic Plan Launch
Remarks by Prof. Njunguna Ndung’u The Governor Central Bank of Kenya at AKCP 5 Year Strategic Plan Launch CBK Governor Speech – Launch of AKCP Strategic Plan-27th October 2014.pdf …
A realistic solution to the interest rate dilemma
Submitted by Everlyne on August 11, 2016 – 9:23am The decision by the National Assembly to pass the Banking (Amendment) Bill, 2015 has triggered intense debate on the anticipated consequences of controlling the pricing of loans by commercial banks in Kenya. If approved by the President in the form presented to him, the new law will cap lending rates at four percent above the Central Bank Rate (CBR) and set minimum interest rate for deposits in interest-earning accounts at 70 percent of the CBR. The raging debate has generally pitted us into two opposing sides, one holding the populist view that Kenyans …
Parliamentary Petition to Disband the CRB Mechanism is Retrogressive
A number of concerns have arisen about credit information sharing (CIS). Many of these are indeed myths about credit reference bureaus. John Lenon once said, ‘’ I believe in everything until it is disproved. So I believe in fairies, the myths, dragons. It all exists, even if it’s in your mind.’’ The first myth arises from the concept called blacklisting. We have heard it from many quarters, including the petitioner who has approached Parliament asking for disbanding of CRBs on account of the blacklisting of borrowers. This is retrogressive, and as we shall demonstrate below, blacklisting of consumers does not actually exist …
“Co-Ownership” of Mobile Money Data: Building a Kenyan credit bureau for the digital age
By Rafe Mazer and Kate McKee, CGAP (www.cgap.org) for CIS Kenya Who owns the data generated by mobile money customers’ transactions? In January, 2016, Safaricom announced a new way for consumers to access statements for their mobile money accounts. With a simple enrollment via short code, you can now receive a detailed statement of all your M-Pesa activity each month or request a statement for the past 6 months. The benefits to customers of this new feature extend beyond its ease of use when compared to the Self-Care option at Safaricom.co.ke. Betty Mwangi, Director – Financial Services, Safaricom, described what …
Blended Scoring – Case Example: Creditinfo CRB Georgia
The economy is not dominated by large and multinational corporations. SME‘s are greatly responsible for economic growth and therefore are an important sector to focus on. Creditinfo Georgia has invested to develop specific tools to help companies provide better, more effective decisions to enable greater access to finance for SMEs. In Europe, for instance, 99% of businesses are small and medium enterprises, and at the same time they contribute 58 cents in every euro in economy. This situation is not specific to the Europe. This problem has attracted attention for the longest time. Investment companies over the world invest a …
BIG Data Lending in Sub-Saharan Africa, Responsibility is key to avoid pain of the past
The experience of the over-indebtedness crisis amongst the poorest in Kosovo and other regions such Andhra Pradesh in India is still a clear memory to those who had to manage the human and financial fallout from these situations. This type of crisis is caused by 2 factors; excessive liquidity largely from donor funded institutions and secondly no credit bureau infrastructure, or usage of it. Are we about to witness the same cycle in sub-Saharan Africa with the highly funded race to provide loans through the trend of alternative/big data, at a time when MFIs are yet to be integrated into …
Changes in World Bank Ranking Criteria in Ease of Doing Business Ranking 2015 challenge States to re-strategize
Recently, the World Bank released the 12th Edition of the Ease of Doing Business Report. Themed Going Beyond Efficiency, the Report compares Business Regulations for domestic firms in 189 Economies across the globe. Separately, Prof Kaushik Basu, Senior Vice President and Chief Economist of the World Bank, pitched for the expansion of BRICS to BRICKS. BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which were all deemed to be at a similar stage of newly advanced economic development. South Africa was recently recognized as an emerging economy and added to the previous BRIC, making BRICS. Prof Basu, who previously served …
5 reasons why you should check your credit report frequently!
The year 2014 began on a high note for Kenya’s Credit Information Sharing (CIS) mechanism, with the publication of the Credit Reference Bureau (CRB) Regulations 2013. The new Regulations opened a new chapter in the CIS mechanism by among others, allowing both commercial banks and microfinance banks (previously known as Deposit-Taking Microfinance Institutions – DTMs) to share information on their good and bad borrowers, away from the traditional approach of sharing information on defaulters only amongst commercial banks. Other provisions included the reduction of data retention rules from seven to five years, issuance of pre-llisting notices to borrowers before they …
Tips on building and maintaining a positive credit profile!
If I am listed in the Credit Reference Bureau, will I ever qualify for a loan in future? What can I do to attain and maintain and build a positive credit reputation? These two questions have lingered in the mind of any borrower at some point in time and in this week’s blog piece, we attempt to share some advice on building and maintaining that esteemed and attractive credit profile. But first, it is important to know that as per the Credit Reference Bureau Regulations 2013, commercial and microfinance banks are mandated to share information on both their good and …