Kenyans are set to benefit from a major financial breakthrough after a Credit Reference Bureau (CRB) introduced a new credit scoring system on Tuesday, February 18.
The newly launched system is designed to improve access to loans, especially for those who have been struggling to secure credit due to a lack of traditional financial history.
According to the bureau, the tech-driven model will combine data from both micro-lenders and conventional banks to create a more inclusive lending framework.
This move comes as recent reports indicate that nearly a third of repeat borrowers in Kenya are unable to receive a credit score, which often results in their exclusion from digital lending platforms.
Further statistics show that out of the 21 million Kenyans listed in the CRB system, about five million remain financially underserved despite the increasing demand for credit.
A significant portion of these individuals consists of small business owners, including micro, small, and medium enterprise (MSME) operators.
Speaking on the matter, the bureau’s local head emphasized that while having access to financial services is crucial, it is not enough to unlock meaningful economic growth opportunities.
“In today’s financial sector, credit bureaus play a central role in promoting financial inclusion. A credit score is one of the key tools that enable this process.
Any efforts aimed at improving credit scoring and boosting financial literacy will only strengthen the progress we have made so far,” he stated.
The new system relies on advanced algorithms that analyze over 140 different financial behavior patterns to assess a borrower’s creditworthiness.
Unlike the traditional credit rating approach, which mainly considers past loan repayment history, this new model evaluates broader financial trends to predict whether a borrower is likely to improve or worsen financially.
“If we can analyze a person’s financial data and identify trends, we can determine whether someone with a poor credit history is improving or whether a person with a good record is declining. If we can see the potential for improvement, shouldn’t we give them a chance?” posed the bureau’s continental chair.
With this approach, the old method of relying purely on past loan repayments will either be phased out or integrated as a foundational aspect of the enhanced system. Experts argue that the previous model has unfairly denied millions of financially active Kenyans access to essential credit, particularly those working in the informal sector.
The bureau further revealed that this new system, already in use by some financial institutions, could help address challenges such as the backlog in processing loans under the Hustler Fund.
By incorporating a broader range of financial data, more underserved Kenyans will have the opportunity to qualify for loans, giving them a better chance to grow financially.
This development is particularly significant given recent global financial statistics, which show that Ksh129 trillion is transacted annually through mobile wallets worldwide.
Notably, Africa accounts for 70% of this amount, highlighting the continent’s heavy reliance on mobile-based financial transactions.
With the introduction of this advanced credit scoring model, more Kenyans will now have a fair chance to access loans, opening up new financial possibilities for individuals and businesses alike.
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