Category Archives: credit reference in Kenya

Banking law amended in 2007

The banking amendment act (2006) and finance act (2006) were gazetted in January 2007. Some changes that will affect the banking system in a busy year, in addition to possible merger activity, include;

– Ban on bank charges within savings accounts. In fact banks must pay interest as long as the account minimums are maintained
– Section 44A (in duplum rule) – banks can only recover principal amount lent, interest to an amount not exceeding principal, and recovery expenses from bad debts. (Fortunately for banks this will not be applied retroactively)
– CBK gets a deputy governor appointed by the president
– CBK also gets to vet the professional and moral suitability of owners (of more than 5%), directors, and senior managers of banks
– All banks must get permission from the finance minister to open branches or establish subsidiaries outside Kenya
– Banks are allowed to invest in real estate. They can also hold land for as long as it takes to realize/recover debt
– Allows sharing of non performing assets information with the Central bank, others banks and credit reference bureaus

Credit reference & bad debt collection in Kenya

In the East African this week, Credit Reference Bureau (CRB) Kenya Country Manager Wachira Ndege, expects more bank’s to use expert evaluation before making lending decisions especially when advancing (unsecured) personal loans. He reveals that Barclays, NIC, Stanbic, KCB card, Fina, and Southern Credit use CRB services.

Also a CRB subsidiary, Collection Africa, is bidding alongside Transunion and Metropol to purchase the bad loan portfolio of National Bank of Kenya at a discount’s of 60%o. Collection Africa has been contracted by collect bad debts by Stanbic Kenya, Stanchart Tanzania and Barclays (in Kenya, Uganda, Tanzania, Botswana, Zamia and Ghana)

Our Elected Leaders: The Good the Bad and the Ugly

The Good

Parliament passed the finance Bill yesterday, which means that it is finally illegal to issue a bouncing cheque. For years now MP’s, who are reputed to be repeat offenders, have resisted passing such a Bill (Standard 9/12 page 1)

The Bad

The Parliamentary Select Committee brushed aside Constitutional Affairs Minister Kiraitu Murungi’s opposition to the Bill and endorsed their own recommendations, which they will present to the Attorney general. The last year has shown the folly of crossing paths with Kiraitu – and it will only lead to delay in completion (if ever) of the very expensive new constitutional process. (Nation 9/12 page 2)

The (Very) Ugly: Ngilu’s sucker-punch

http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=1&newsid=21431

Late on the 2nd last day of the parliamentary year, while most of her cabinet opponents were settling down to plan their retreats and holidays, parliament unanimously passed Minister Charity Ngilu’s controversial National Social Health Insurance Fund Bill. The Nation errs in using the word ‘unanimously’ because other reports indicate that there were only about 30, mostly opposition, MP’s in the house at the time of the debate and voting. However good or bad the bill will turn out to be next year, the fact that 30 non-working, non-taxed, wealthy people who will not pay for, or use, the new scheme can pass such a momentous Bill in the middle of the night defies logic.

Other Good and Bad Events

(Almost) Good http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=1&newsid=21430

All top parastatal jobs will in future be advertised and open to competition, says Muthaura (yeah, right!)

Bad (Sign) – Somali Peace Plan in Jeopardy

http://news.bbc.co.uk/2/hi/africa/4078251.stm

A Somali minister and two deputies have resigned from the country’s newly-formed transitional government. While the trio complained that the administration was too large and not representative enough, correspondents say they may have simply been unhappy with the jobs they were awarded in the new team.