FINANCES

Push for credit reforms gains momentum

The financial experts are meeting in Nairobi for the 5th Africa Credit Information Sharing (CIS) Conference which focuses on inclusive credit market in Africa.

In Summary

• Proposed credit infrastructure reforms include establishment of resilient credit reporting systems, collateral registries, legal structures and regulatory frameworks for fintech development.

• Central Bank of Kenya deputy governor Sheila Mbijiwe has reiterated the importance of having a stable and inclusive financial sector for economic development of countries.

CBK governor Patrick Njoroge with Kenya Bankers Association CEO Habil Olaka during a past credit information sharing,CIS Conference, in Nairobi/ENOS TECHE
CBK governor Patrick Njoroge with Kenya Bankers Association CEO Habil Olaka during a past credit information sharing,CIS Conference, in Nairobi/ENOS TECHE

Africa’s financial sector players  now want the implementation of credit infrastructure reforms to improve financial inclusion in the region.

The financial experts are attending the 5th Africa Credit Information Sharing (CIS) Conference in Nairobi.

Under the theme ‘Credit Infrastructure for Sustainable Growth: Entrenching Dynamic Assessment of Risk’, delagates are meeting  to discuss how the infrastructure around credit information sharing can provide a more inclusive credit market in Africa.

 

Speaking during the opening ceremony of the two-day conference, CIS Association of Kenya Jared Getenga noted that a robust credit infrastructure is key to solving some of the perennial financial sector challenges.

This includes high cost of credit and financial insolvency.

“A strong credit infrastructure will enable efficient and effective access to finance, financial stability and socially responsible economic growth through credit reporting, secured transactions and collateral registries and insolvency and debt resolution,” said Getenga.

The proposed credit infrastructure reforms include establishment of resilient credit reporting systems, collateral registries, legal structures and regulatory frameworks for fintech development.

Players are also seeking a robust credit reporting mechanisms, insolvency and debt resolution frameworks, alternative credit scoring mechanism among others.

 Central Bank of Kenya deputy governor Sheila Mbijiwe has since reiterated the importance of having a stable and inclusive financial sector for economic development of countries.

“To achieve transformation and economic growth, there is a need to have sound financial systems that build and connect savings to investments. This will create opportunities for scaling up financial inclusion through ease of credit access and resolution of debt,” said Mbijiwe.

 

The conference comes at a time when the Central Bank of Kenya (CBK) has issued the Kenyan Banking Sector Charter, that places the CIS mechanism at the centre of efforts to improve loan pricing and transparency in Kenya’s credit market.

In addition, a movable collateral registry has been established to support the implementation of the Movable Property Security Rights Act, 2017.

The Registry is set to improve access to credit for small-to-midsize enterprises who have been locked out of the formal credit market,because of the informal nature of their records and lack of collateral for secured loans.

Over the years, Kenya has witnessed improved ranking in the ease of doing business ranked 2nd in Africa after Rwanda in 2019, an achievement in part attributable to a strong Credit Information Sharing (CIS) framework that is continuously being improved.