The mere mention of CRB within the Kenyan population, especially the youth has been a cause for concern. But as it emerges, this young demographic needs not to worry since being on CRB is actually a good thing.
Credit Reference Bureaus (CRB) have information for more than 16 million Kenyans. This information containing both details of those with performing and non-performing facilities.
Out of the 16 million Kenyans on CRB however only 4 million have been listed negatively “blacklisted” while more than 12 million others are in the clear.
It is important to note that anyone with a credit facility is on CRB, but not everyone on CRB is listed negatively.
Speaking to Kenyans.co.ke, Kamau Kunyiha, the Regional Manager East and Southern Africa at Creditinfo Group noted that being on CRB should in-fact be encouraged as it serves as an individual credit CV that could vouch for you in the event you do not have enough collateral for the lenders.
“The credit bureau is the only independent source of truth on your character when it comes to borrowing. So it’s a very important document that you should take care of like your CV. It's available to you to view when you need to view, you’re entitled to one free copy every year, have a look at it, confirm that the details reported by the lenders is correct."
Kunyiha further adding that the CRB report is a record on how individuals are managing their credit hence why they should have a record as opposed to being afraid of being listed.
Sentiments that were echoed by Jared Getenga, the Chief Executive Officer at Credit Information Sharing (CIS) Association of Kenya who noted that, “having a CRB record can be used to measure your level of responsibility when it comes to repaying loans.”
He also described being on CRB as having a character witness who can testify to an individual credit character and explain why one takes credit, how often do they repay, and when they default what are the reasons.
Information they both say could makes it easier for lenders to assess individual risk when issuing loans even without collateral noting that in the past a majority of Kenyans were locked out of the credit market due to lack of collateral or being unemployed.
Data from the Central Bank of Kenya (CBK) shows that Credit to the private sector, grew by 7.8 percent in the year to October compared to 7.0 percent in August, which are both below the ideal growth level of between 12 and 15 percent to support economic development.
This coming at a time when the government has directed lending institution to stop forwarding information on defaulters and directive that is seen as counterproductive to the gains made in the credit sector.