New rules for Kenya credit bureaus amid Covid-19

The Central Bank of Kenya (CBK) has proposed radical new measures relating to credit reference bureaus operating in the country. It barred digital / mobile-based lenders from submitting information to credit reference bureaus, following public complaints.

It also proposed that people should be able to obtain their first clearance credit certificates at no charge, a move to benefit youth and graduates seeking employment. Other measures were that the minimum amount for which one can be reported is Kshs 1,000 (~$10) and savings & credit societies (SACCO’s) are now included as authorized subscribes of credit reference data.

As part of the Government’s response to Coronavirus, the CBK also suspended new listings to credit reference bureaus for loans that become delinquent between April 1 and September 30 to shield borrowers at a time when incomes and economies are disrupted.

In addition, Kenya’s Parliament will soon debate new clauses of credit reference regulations that include:

  • A credit information provider shall not provide information relating to a customer to any bureau if the customer notifies the provider, by writing or verbally, that the information is inaccurate.
  • A bureau shall carry out due diligence and suitability assessment of the third-party credit information provider – to learn about their ownership, management, legality status and accuracy of their records.
  • Bureaus are only to share with the customer, the Central Bank, a requesting subscriber and a third party authorized by the banking act, Microfinance Act or Sacco Societies Act.
  • Where a customer disagrees with the resolution of some disputed information, the customer may request the bureau to attach a statement of 100 words to the customer’s credit report, setting out the customer’s claim.
  • The Central Bank shall be the owner of all information and data held by bureaus and regardless of how the information or data is processed. CBK shall retain the right of access to data even after revocation or expiry of any license issued.
  • Every bureau shall prominently display on its premises and on its website, an up-to-date list of all third-party credit information providers that have been approved by the CBK to submit credit information it.
  • Credit reference bureaus shall now have to conduct public education programs on how credit information sharing works, and how the public can access services that they can benefit from.