Category Archives: citizen data

Konza and Smart City Solutions, post-COVID

This week, the Konza Technopolis Development Authority (Konza) hosted a webinar, with the theme was using digital technologies in the planning for the future of cities after coronavirus (COVID-19) has passed.  

It was unique in that it featured two of the original main movers behind Konza; Bitange Ndemo, the former Permanent Secretary in the Ministry of Information and Communication, whose’ brainchild was Konza and Mugo Kibati who was the Director-General of Kenya Vision 2030 Delivery Board, and Konza was one of their flagship projects.

The day’s main speaker was Jerome Ochieng, the current Principal Secretary ICT and Innovation who said it was exciting to see a planned city being built from scratch. He said that previous cities had traditionally developed services in silos, but this had led to high costs, waste, and duplication. But he said, going forward with Konza, and using smart cities planning and technology, they would be able to improve the quality and performance of urban living spaces, while reducing energy consumption, service management costs, greenhouse gas emissions. He added that COVID was one of the greatest advertisers of technology – to solve challenges we encounter and that such events will drive how the government will provide services post-COVID.

He highlighted they had been pre-occupied with building the necessary and extensive “basement” work of horizontal infrastructure at Konza- underground utility tunnels (for fibre, power, water and sensors), access roads for pedestrians, BRT etc. These would serve the current and future service needs of the smart city, but that once that was done, other construction projects would take off quickly.

At this stage, Konza, which is 30% done, will also host a permanent building of the national data centre that will be ready by year-end while the city will also host the Kenya Advanced Institute of Science and Technology, according to Konza CEO, John Tanui.

Mugo Kibati said we are now in an era of lower touch, and lower contact for all our interactions and this was happening through technology. Telkom Kenya, the company he now leads, is aiming to position itself to serve these current and future needs as, even after COVID ends, as some changes it has induced, will remain the norm and sustain long after the pandemic. he cited how residential homes now require more bandwidth as more people are working and schooling from home, ordering food and getting medical attention via telemedicine etc. He said that in smart cities, and with more data being generated, that require predictability and planning, telcos will have to move up the value chain to be part of that future.

Bitange Ndemo said that when Kenya did the open data initiative, they had to host a lot of data outside of the country, but that this would not happen any more now that there is a data centre at Konza. He highlighted how there would be opportunities to use data locally to upscale SME’s.

Adam Lane, Deputy CEO Government Affairs at Huawei Kenya, said that Konza will have an intelligent operation centre, comprising network, cloud, platform and then apps, that will provide management for the smart city, like other centres that Huawei has built. He said that on a smart city street, you do not have a pole for lighting, a pole for electricity, a pole for telecommunication etc.

How to Get and Understand your Credit Score

Have you ever seen your credit report? It is often a requirement for job applicants in Kenya to obtain a “clearance certificates” from a credit reference bureau (CRB) as one of the half-dozen source documents to be considered in their vetting.

Kenya has three licensed credit reference bureaus; Credit Reference Bureau Africa (trading as TransUnion), Creditinfo CRB, and Metropol CRB. The initial law on credit reference means that every Kenyan is entitled to get a free credit score every year, but that is not quite the case.

I tried to obtain a report from all of them and here is a review of the three services, in order of ease of access.

3. Metropol Credit Reference Bureau says that you can get your first free credit report by dialing *433# and by paying Kshs 100 via M-Pesa. Prompts indicated that a payment was required and I entered and sent the amount via M-Pesa, but the payment transaction bounced back. Did this twice, and nothing ever came from Metropol and this needs a fix.

2. TransUnion: Credit Reference Bureau Africa was Kenya’s first credit reference bureau and now trades as TransUnion. Registration is Kshs 50/= for you to get your first free credit report. There are two ways of interacting with the service by SMS or by downloading an app.

The SMS route (number 21272) led to a prompt to pay Kshs 50 by M-Pesa. I did that and was led to a mini-menu to choose and receive more text messages. However, each SMS cost Kshs 15 – 19 each to proceed to the next screen and at some point, the TransUnion site gives advice that it is better to download the app and save on SMS transaction costs.

I did that and for the TransUnion Niapshe app from the Google store through which one can request a credit report and a clearance certificate. After payment, it now says you will be getting the free report annually. Also, that as a subscriber, you will get FREE SMS alerts in case of a new enquiry by a lender, new loan information submitted, when a loan goes 60 days into arrears, as well as when a loan is fully repaid.

Since I had already paid the 50, I asked for the report to be emailed. It came behind a password protect for me to enter my national ID (number) to unlock, but that did not work. I emailed a few times back to customer service and got an unlocked report in an email two days later.

TransUnion also sells “clearance certificates” at a cost of Kshs 2,200 (~$22)

1. Creditinfo CRB Kenya. On their site, you enter your name, ID, email, phone number and that leads to a sign-in prompt to pay Kshs 50. Did that, and within five minutes, got my credit report, a four-page PDF with a numeric score, risk classification and the number of credit queries in the past 12 months.

Findings from the Credit Reports

There are similarities in the two reports obtained from CreditInfo and TransUnion including:

  • They have some personal information, but the range and detail vary. TransUnion has more tries to add all your known locations and post office addresses. It reads information from your national ID including home location.
  • They have bank borrowing – loans, credit cards, and bank loan apps (in my case Timiza from Barclays and M-Shwari from CBA/Safaricom).
  • Both collect information on borrowers such as loans that are performing and non-performing loans, fraud, bounced cheques, credit applications, length of credit history, number of disputed record, court disputes etc. 
  • While CreditInfo gives a score (presumably between 0-1000), TransUnion also does but also gives a band to show what its 0-1000 scores mean. The top band being AA being (700 to 1000), followed by BB is (690-697), CC (675 – 689), and a few others up to the bottom (score of 1-489). There is also a star ranking of four kinds; with two dreaded categories of “***Adverse Action Reasons” and “**** Probability Of Default”.

Missing from the reports are:

  • Other loan apps – It appears that the many loan apps Kenya are not subscribers, nor are they sharing their information with the CRB’s.
  • They do not appear to have savings and credit society (SACCO) loan data – despite the numerous ads that various SACCO’s have shared about posting loan defaulters to CRB’s.

Lessons for borrowers

  • Watch the use of your borrowing; while you won’t have a credit report unless you borrow, borrowing too many times, even if it’s small loans that you repay quickly, may be a red flag. Those emergency loans you take on an app stay on your report for five years after repayment.
  • Information posted on different dates can overlap and give conflicting data. But is it in your interest to update the database? E.g. it may have your old employment history or lack your latest address.
  • There is an attempt to collect all phone numbers and relations associated with your ID.
  • Microfinance institutions and SACCO’s are not benefitting from the credit reference data.
  • TransUnion sent an email with some explanations of transaction items – a key to explain e.g. Performing Account with a default historya loan that you defaulted and later repaid/ you are still paying. Although updated as cleared or closed, the default information will remain in the credit bureau for 5 years from the date of final settlement. Also Non-Performing Accounta loan that you have defaulted (90 days) and is still outstanding. It impacts negatively on your credit score.

Summary

In 2014. banks requested a total of 1.6 million credit reports and that jumped to 6 million in 2015 and then declined to 4.9 million and 4.3 million in subsequent years. Meanwhile individuals requested 33,000 of their own reports in 2014, 75,000 in 2015, 84,000 in 2016 and 131,000 in 2017. The Central Bank of Kenya attributed this to people seeking credit bureau clearances to contest for Kenya elections in 2017, but it is worrying that banks are requesting fewer new reports as they work to build profiles of existing borrower.

Accurate credit scoring remains a holy grail in this economy where so many transactions are in the informal sector, and in cash. Credit reference is here to stay, even though many Kenyans don’t understand it or the consequences of not having good credits. Banks have now always been honest brokers, and they have been accused of not sharing information and offering good rates to good borrowers, but only posting defaulters into the credit reference bureau pool. My search proves that this is not the case, but the perception has led to a petition to Parliament to end credit reference bureau practices in Kenya over listing people for owing frivolous balances.

Still, there is no harming in getting your report and knowing what is out there about you.

EDIT: What does your score mean?  This article from South Africa is applicable:  

The different credit bureaux in SA all have slightly different ways of calculating your credit score, but in general scores range from around 350 to 999, and what you should be aiming for is a score of 600 or more…at this level, you should not have any problem getting a loan, provided it is within your means to pay the monthly instalments…and the higher your score is above 650, the more likely you are to be able to negotiate interest rate concessions…