Market News

CBA plans digital platform to gauge customer creditworthiness

Eric Muriuki
CBA's new business general manager Eric Muriuki. FILE PHOTO | NMG 

Commercial Bank of Africa (CBA) is building a digital platform where small and medium enterprises’ commercial transactions will be recorded and a data-based financial history generated for each borrower.

General manager in charge of new business and the phone-based CBA Loop platform Eric Muriuki said the new product is expected to facilitate small and medium enterprises (SMEs)’ bid to build viable financial history that can be relied upon to gauge an individual business-owner’s creditworthiness.

“It is under development and will be ready in the next six months where sales and payments data will be readily posted. This will give us ample insights about individual businesses that could see us discard the current practice where collaterals are required before the decision to dish out a loan to our customers is made,” he said.

Speaking at a public forum attended by SMEs in Nairobi, Mr Muriuki said the new product is in line with a recommendation by Kenya Bankers Association submitted to the Central Bank of Kenya(CBK) seeking formulation of a policy allowing banks to use a borrower’s financial data when determining the interest rate to be charged.

Good borrowers with a history of prompt repayments of loans and a robust financial history of their businesses could enjoy access to larger loan amounts without necessarily being required to place securities for the same.

Mr Muriuki said most businesses lacked credible financial records that could be relied to determine a client’s financial worth.