Metropol CRB pilots credit rating as loaning reference

Sam Omukoko; business ratings to boost investor confidence for long term financing

Metropol Credit Reference Bureau is conducting a pilot programme on how banks can use credit rating as a reference point to offer loans without collateral or a guarantor.

Metropol Corporation Group Managing Director Sam Omukoko says the programme is being piloted in Nakuru county in conjunction with Equity Bank.

Addressing business community stakeholders in Kakamega County, Omukoko said Credit rating uptake in the country is on the rise as lenders adopt risk-based lending mechanism.

“If a business gets a credit rating determining its ability to service a loan or a facility of whatever nature, it becomes a reference point to get credit,” said Omukoko.

In the pilot county of Nakuru, Omukoko said Metropol has rated about 600 businesses in the county, which now have a credit score.

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Speaking during a Webinar attended by over 200 business people on Medium, Small and Micro Enterprises (MSME) Access to Credit on September 24, Omkoko urged the lenders and borrowers to use CRB ratings.

Credit rating is a quantitative assessment of the cash flows of a business entity that determines the financial strength of servicing a financial obligation.

According to Omukoko, credit scores are updated every time new information is added to the borrowers’ profile.

“When an SME has a full credit report, some of the information that banks would be looking for to appraise the credit application would already be in the credit report,” said Omukoko.

With CRBs being reliable institutions to banks in terms of assessing credit risk for borrowers, they rely on credit reports to avail creditworthiness to businesses.

“Banks now are relying on credit reports to evaluate the creditworthiness of any business. There has been progression from just using credit report to now using credit scores because,” he added.

Credit rating has also fastened the processing of loans as some loans can now be provided online based on the credit scores and credit limits. Entrepreneurs on the other hand can use the analysis to improve their businesses.

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