Ruto insists CRB listing review to start this week amid protests from World Bank and CBK
Ruto insists CRB listing review to start this week amid protests from the World Bank and Central Bank of Kenya.
President William Ruto has said that the government will start reviewing the credit reference bureau (CRB) rating formula this week.
According to Dr. Ruto, the change will enable the establishment of a mechanism that ranks debtors according to their capacity for compliance rather than the usual assumption that “most of them are defaulters.”
Ruto made the remarks during an interview on Al-Jazeera on Saturday, September 24.
“Next week, we are going to rework the whole credit rating system. The current one is an all-or-nothing system; you’re either listed as a defaulter or not. There are some 15 million people listed in the CRB. We’ll keep the credit reference bureaus, but change the scoring mechanism so that it’s not all-or-nothing,” Ruto told Al-Jazeera’s James Bays.
During campaigns leading up to August 9, 2022, General Election, Ruto claimed that many young people could not get loan facilities because they had been registered in the CRB as defaulters.
He pledged that if he were elected president, he would revise the rating methodology to make credit available to young people who, in theory, couldn’t do so under the present CRB listing formula.
According to CRB statistics from December 2021, there were 4.6 million negatively listed (defaulter) accounts out of a total of 15 million accounts, an increase from 3.2 million accounts in April 2020.
However, Ruto’s proposal to revise the Credit Reference Bureau (CRB) framework has been faulted by the World Bank and the Central Bank of Kenya (CBK).
Patrick Njoroge, governor of the Central Bank of Kenya (CBK), reaffirmed the importance of adhering to the nation’s monetary policies saying that the CBK won’t be drawn into taking actions aimed at satisfying political interests.
Speaking during an interview with an international media house, Bloomberg, CBK Governor explained that existing data from CBK will guide financial policies and expenditures for the next government.
He insisted that the data from CRB will help the country remain afloat and overcome recession waves ruling out being drawn into political expediencies.
World Bank Group (WB) has also questioned the CRB listing review observing that the action was not only unproductive but also put credit lenders at risk in a report titled, Fintech and the Future of Finance.
According to the World Bank, the rule made it difficult for financial institutions to access potential borrowers’ credit scores.
Also read,
Ruto allays fears he’ll be an authoritarian president
World Bank faults Ruto’s plan to delist Kenyans from CRB
Blow to Ruto as CBK Governor says won’t engage in ‘political expediencies’ over Ruto’s CRB promise
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