Borrowers will have access to their credit reports on mobile phones after the launch of a new service by Metropol Credit Bureau.
The use of mobile phones is expected to boost access to credit reports by individuals, which has been low compared to institutions.
Currently, a person has to visit offices of credit reference bureaus in Nairobi to get a credit report or lodge a complaint.
“Very few people are able to access their reports even though the law provides that each person listed on the bureau database is entitled to one free credit report per year,” said the Metropol CEO, Mr Sam Omukoko.
Metropol is one of two registered credit reference bureaus, the other being CRBAfrica. Central Bank data shows that banks had requested 1,542,988 credit reports between the launch of credit information sharing in July 2010 and March 2012, while individual customers had requested 7,603 reports.
“The requests made by customers are still low,” noted the banking sector regulator. Mr Omukoko said Metropol receives about 300 requests from individuals per month.
Access to credit score
The SMS system, dubbed Metropol Crystobol, also facilitates access to credit score, customer complaint management, and alert services each time client records are visited. A credit score, which rates an individual’s credit worthiness based on historical repayments and current loan obligations, ranges on a scale of 200 to 900 with a mark below 400 indicating a defaulter.
A credit report request beyond the annual free one is charged at Sh500, a credit score report is charged between Sh250 and Sh300 depending on its depth, while each alert is charged Sh20. The payments will be made through mobile money platforms such as M-Pesa and YuCash.
Due to the large size of the credit reports, responses will be sent to submitted e-mail address. Banks check with credit bureaus on whether any of their loan applicants have defaulted before processing a loan. Most people learn from banks that they have been blacklisted from accessing loans.
Increased access to credit reports by the public will help boost the accuracy of the information shared and diffuse the notion of credit bureaus’s task being that of blacklist defaulters.
“Complain-registering has had to be manual in the past, but now this will allow much access to information whose accuracy can be verified,” said Kenya Bankers Association chief executive Habil Olaka.
The law requires banks to share negative information, which has seen over 213,000 people listed with the bureaus.