Big Boost for Kenya’s Mobile Lenders

At a budget reading on Wednesday 8th June, Kenya’s Treasury Chief proposed adding more proxies in measuring the credit worthiness of individuals in Kenya. The Credit Reference Bureau, Kenya’s Central credit information sharing database, intends to incorporate rental payments records from landlords, utility payments – water and electricity – , mobile operator data, and Pay TV services.


According to the Business Daily, Rotich

“To maximise on these benefits, I am today proposing additional amendments to the Banking Act as well as the Sacco Societies Act to facilitate cross border information sharing and to allow saccos and utility companies to more effectively participate in the Credit Information Sharing framework.”

Which, completely makes sense and is a laudable move (from a government I am highly critical of). What will comprise the basket of proxies is a good mix that nets in a large part of Kenyans, at least 60% by my rough calculations.

Metropol Credit Reference Bureau Managing Director Sam Omukoko said

“The participation of landlords would make the platform even more efficient,”

Which does not say much. What he means to say is the effect of more data cross-shared by banks, SACCOs and even mobile lenders, will (in theory) lower higher costs of borrowing. Additionally, it frees up the mobile lending space to more companies – foreign and domestic.

In late March 2016, Kenyan startup Branch, a mobile app lender, announced it had raised $9 million from VC fund Andreessen Horowitz. The mobile lender heavily relies on the shared Credit Reference Bureau Data.

My only contention is it is not sufficient for some segments of Kenya (the ones that matter). More thought should go into incorporating data that does not readily lends itself to being quantified.

Social capital for example, plays a huge role in rural communities and the informal sector. As I have found, reputation and relationships amongst women informal traders, boda boda riders or an informal chama group is a valid credit proxy as any other. It is therefore necessary to accurately reflect the credit worth of these segments, else, we risk marginalizing the very people we seek to include financially .

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