HOPES of further favourable cost of loans now rest on completion of ongoing reforms in banking support services by state agencies and expansion of credit information sharing beyond commercial lenders.
Impending automation reforms at the heavily manual lands and companies registries, and formulation of a facilitative legal and regulatory framework for an electronic movable assets register have been also identified as hurdles to single-digit charges on loans.
The roping in of non- bank credit providers, utility companies and mobile network operators into the five-month old full file credit sharing system have further been cited as important in facilitating an elusive low-interest regime.
The above factors were outlined on Thursday as key in complementing the standard
"These analytical measures are aimed at improving credit risk management that will lead to changing from our collateral technology which is expensive because the market is perceived as risky," Ndung'u said. "Sharing of information capital will particularly help the customer know why a risk premium is loaded on his or her account."
Olaka reassured that increased transparency through the APR- a measure of total cost of the loan and its repayment schedule -would stimulate competition within the industry, thus contributing to more competitive interest rates for customers with a good credit track record.
"The high interest rates that affect us are a symptom of market conditions," Olaka said. "High inflation or a depreciating currency or increased government borrowing tends to push up rates."
Metropol, a credit reference bureau, on Thursday launched a consumer and business credit scores it hopes will help lenders manage perceived risk in credit market.
The firm will from
Metropol chief executive Sam Omukoko said the firm will track individual bio-data including contacts,national identity number, employment and scheduled payments(Q-score) together with credit history from financial institutions, utilities, mobile money transfer firms and higher education institutions.
"You may find that if a customer has little information on their credit profile, then they will have a very low Q-score," Omukoko said. "If you have a low score, we cannot generate the risk measure on your profile and you will be disadvantaged in negotiating for better terms with your bank."
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