Credit bureau wants rent defaulters listed to boost loan vetting

A credit reference bureau (CRB) wants landlords included in the exchange of credit information to boost the vetting of borrowers.

This comes a day after Treasury secretary Henry Rotich disclosed plans to rope in utility companies in the credit information sharing network.

“The participation of landlords would make the platform even more efficient,” the managing director of Metropol Credit Reference Bureau (CRB) Sam Omukoko said.

The plan is to deny or issue costlier loans to borrowers based on their rent paying history.

Mr Omukoko welcomed Treasury’s inclusion of utility companies such as Kenya Power, water firms, mobile operators and Pay-TV service providers in credit sharing saying this would boost the platform by providing a truer picture of the prospective borrowers.

“The  history of paying utility bills, like telephone, cable, electricity, or water, when they go in someone’s credit report would really be useful in providing the creditworthiness of prospective borrowers and giving a correct credit score,” said Mr Omukoko.

“For us to start going in this direction, however, we need to have bills such as that of electricity in the name of individuals and not landlords,” he added.

Mr Rotich said on Wednesday the Credit Information Sharing (CIS) framework in Kenya has continued to develop and increase its coverage as a result of facilitative reforms put in place over the years.

“Indeed, the expansion of the CIS framework was one of the key factors behind the improvement in Kenya’s ranking in the World Bank Ease of Doing Business indicators this year. 

Apart from the obvious benefits to the borrowers who maintain good credit history and to lenders who are able to get information on potential borrowers, the CIS regime is important to the economy as a whole in terms of increasing access to credit, reducing transaction costs, enhancing efficiency in financial intermediation and fostering financial sector stability through reduction in non-performing loans,” said Mr Rotich.

“To maximise on these benefits, I am today proposing additional amendments to the Banking Act as well as the Sacco Societies Act to facilitate cross border information sharing and to allow saccos and utility companies to more effectively participate in the CIS framework.”

Kenya has three Credit Reference Bureaus. They are Creditinfo CRB, Metropol CRB and Transunion CRB.

The Credit Information Sharing Association of Kenya, Kenya Chief Executive Jared Getenga earlier said cross border information sharing and allowing Saccos and the Utility Companies to share information would boost the credit sharing system.