Commercial banks, SACCO’s microfinance institutions, and digital lenders are in the process of transitioning into Risk-based Credit pricing framework as a regulatory requirement. Kenyans whose credit scores are below the minimum required by lending institutions for loan consideration are, however, faced with a decision of having to borrow at a higher cost compared to those with credit scores are above average.

Banks use credit scores to determine the risk premium to be assigned to customers. The score is developed from the behaviour pattern (credit history) of credit data provided to Credit Reference Bureaus (CRBs).

Several ways to improve your score include repaying loans on time and keeping the debt range low, depending on your income.

Metropol CRB’s Credit Score, better known as Metro-Score, ranges from 200 to 900, where a score of less than 400 indicates that the person to whom the score refers is in some form of default with at least one lender.

The following are some of the primary ways to improve your credit score:

•Monthly loan and debt repayment on time before the due date.

•Keep an open line of communication and arrange for repayment arrangements when experiencing financial difficulty with the creditor.

•Limiting the number of credit card applications is a sure way of never extending your credit amount.

•Not going over the top while spending is the wisest of decisions one can take while trying to improve your credit score.

•It is not always advisable to close a credit account that is not being used since it can lower a person’s credit score.

You can check your credit score by downloading Metropol Crystobol App from Google Play Store/App Store or by dealing *433#.

How Credit Score is Calculated

Credit Score is calculated using mathematical models developed from the behavior patterns of credit data provided to CRB.

The formula looks at variables such as outstanding balances, total available credit, late payments, and the age of the credit account.

Traceability factors are also considered to ensure improved chances of recoverability in default.

The more traits you share with people who have proven reasonable credit risks, your score is higher. It uses payment performance, amount of debt, and other characteristics to assess a borrower’s creditworthiness.

An excellent score will make a borrower more attractive to Lenders and give access to cheaper loans in terms of interest rates, fees, and commissions.

Diamond Trust Bank’s (DTB) net profit surged by 20.8 percent to Ksh.5.8 billion in nine months to September 2022.

The bank reported a Ksh.4.8 billion net profit in similar period last year. Higher income in quarter three results added to its profit growth with positive revenues at 21.5 percent to Ksh.23.7 billion.

Non-interest Funded Income (NFI) grew to hit Ksh.6.9 billion largely from greater foreign exchange trading income while net interest income improved to Ksh.16.8 billion from Ksh.14.7 billion.

DTB’s total operating costs grew at the same rate as income to hit Ksh.14.7 billion from Ksh.12.2 billion.

Its loan book expanded by 18.5 percent to Ksh.243.7 billion while customer deposits have grown by 11.1 per cent to Ksh.359.7 billion.

With the expanded loan portfolio, its gross Non-performing loans (NPLs) surged by 28.4 percent in three quarters to Ksh.33 billion enforcing the higher cover.

The Kenyan government has achieved little effort to meet its citizens’ appetite for credit through the state-created Development Finance Institutions (DFI) like Youth Enterprise Fund, Agricultural Finance corporations, Women Enterprise Fund etc., leaving it to the private sector that has taken over to dominated the credit market.

Since independence, key financial institutions which are regulated by the banking act have been leading in offering credit facilities.

By 2008, Kenyan banks were sinking with huge Non Preforming Loans (NPLs) portfolio and through scrutiny on the data indicated that the NPLs mostly belonged to a click of individuals commonly referred in the banking corridors as perennial defaulters – individual who hopped from one bank, took a loan, defaulted and then hopped to another bank took another loan and defaulted. 

This saw the birth of Credit Reference Bureau (CRB), Regulations 2008, which became effective in February 2009 to curb the NPL menace.

As per the regulations, all the licensed banks were mandated to share all the information of NPLs through CRBs which were new entrant in the market.

The 2008 regulations saw huge numbers of loan defaulters being listed with the CRBs hence the origin of the word LISTED.

Even with the new regulations and increased number of listed defaulters, Kenyans believed and still do that being listed means being denied access to any form of credit. According to Credit Information Sharing Association of Kenya (CIS Kenya), 16 millions Kenyans are listed with CRBs, out of whom, only 4 million are negatively listed.

The latest directive by the Government set the heads rolling in the credit space when the Central Bank of Kenya (CBK) directed all CRBs to include “a standard statement on all credit reports indicating that “a customer’s credit score should not be used as the sole reason by a lender to deny a customer a loan

This means that a lender cannot deny any borrower a credit facility based on their listing status, but instead, apply Risk Based Credit Pricing on their credit products. This means that all borrowers will be given a credit score based on how good they are in honouring credit obligations.

Metropol CRB, plus two other regulated bureaus have been tasked to include an enhanced credit score in all borrower’s credit reports. A lender will be required to consider the borrowers credit score among other prevailing factors in arriving at a lending decision.

Going forward, the lenders will have an option to give credit at a higher credit rate to the borrowers who they consider to be risky based on their low score.

For example, a borrower may be considered as a high risk if they have a record in delaying when paying their credit obligations or their loan instalments.

An employed person who pays his instalment on time may be viewed as a low risk and will have a high score. This means they can access credit from a lender at a lower interest rate.

A borrower’s score may be determined on their delinquency, amount of outstanding loans, employment status, default on historical loans, estimated income, ability to provide guarantors for the loan among other prevailing factors.

Should the new measures will be adapted in the lending space, it will be illegal to use a borrower’s credit listing status ONLY as a factor to deny them loan.

Each lender will be required to use the credit score of a lender plus other factors to arrive at a decision to extend credit facility or not.  This will also determine interest rate to extend a credit to a borrower based on how risky they seem. 

The borrower will have a right to receive a risk-based pricing notice and an advice on why they are receiving a credit facility at a higher rate than other borrowers. The notice may contain information advising the borrower on their credit score, the score range from the best to the worst, how the score was arrived at and the negative effect of a bad score.

The new measure may open more avenue to access credit for individual borrowers, Micro, Small, and Medium sized Enterprises(MSMEs) whose effect will be a robust growth of the economy.

With or without the government intervention, it will continue to be the borrower responsibility to honour their debts obligations when they fall due as a way of building an attractive credit score which will allow them access to credit facilities at a lower rate.

It’s always responsible to honour debts obligations or otherwise discuss with the lender in case of delay in meeting repayment obligations to avoid future problem with lenders.

NCBA’s loan portfolio on its digital platform shoot to Ksh.521 billion in nine months to September 2022.

This makes the lender the leader in digital lending, according to its quarter three results released Thirsday.

Under the portfolio, Fuliza takes up a huge portion at Ksh.461 billion compared to Fuliza currently at Ksh.60 billion.

The bank said it will waiver Ksh.5.5 billion in digital loans in line with a directive issued by the Central Bank of Kenya (CBK) – under the Credit Repair Framework.

All banks in the country are expected to move in similar direction where Kenyans will enjoy a Ksh.15 billion windfall in digital loans waiver.

On salary loans advanced to employees, Co-operative banks takes the lead with latest record showing Ksh.44.12 billion was advanced as of September 2021.

The advance borrowings, mostly to meet short-term needs such as buying food and paying bus fare, grew 28 percent from Ksh.34.4 billion in a similar period in 2020.

The borrowing pushed its total digital lending to Ksh.173.5 billion in 2021 from Ksh.105.7 billion in September 2020.

NCBA net profit in nine months to September surged by 97 percent to Ksh.12.8 billion from Ksh.6.5 billion profit posted same period last year

the record profit for the lender has been anchored on a 39.8 percent rise in non-interest funded income under which foreign exchange income more than tripled to Ksh.9.2 billion from Ksh.3.5 billion.

Net interest income has grown by 14.9 percent to Ksh.23.2 billion from Ksh.20.2 billion last year.

Growth in interest income has been supported in part by an 11.7 percent growth in net loans and advances to customers which stood at Ksh.266.1 billion from Ksh.238.2 billion.

The lower loan-loss provisioning costs have been backed by a 20.9 per cent decline in gross non-performing loans (NPLs).

NCBA has not recommended the payment of an interim dividend for the period.

Kenya Electricity Generating Company PLC (KenGen), has rolled out an elaborate plan to lead Kenya’s transition from gasoline-powered vehicles to Electric Vehicles (EV) as another way of combating climate change while solving transportation challenges in the country.

To launch the project, KenGen unveiled its first four Electric Vehicles (EVs) in Nairobi earlier today in a move to support its diversification ambitions in the e-mobility sector.

The four vehicles, which include two SUVs and two double-cabin pickups will primarily be used for data collection and policy development as the company prepares to install over 30 EV charging stations across the country in 2023.

The venture is part of the NSE-listed company’s environmental and economic sustainability plan to reduce global GreenHouse Gas (GHG) emissions by inspiring confidence for wider EV adoption across the country. The company will use the cost and environmental data from the four EVs to transition its fleet to EVs, further demonstrating KenGen’s role in elevating its position on attracting investment funds financing green initiatives.

Speaking during the launch, KenGen Acting Managing Director and CEO, Abraham Serem, noted that the pilot EV units would give them a comprehensive analysis of the feasibility of e-vehicles transition while also providing insights on initial technology choices for electric charging infrastructure in the country.

“I am glad to announce that in the next one year, we plan to roll out about 30 EV charging stations in major cities across the country. The four acquired EVs we are launching today will give the company first-hand experience and data on electric vehicles,” he said, adding that this is an endeavor they seek to conduct collectively with other stakeholders.

“The development of e-mobility is an area that will require a multi-sectoral approach. Under the leadership of the Ministry of Energy and Petroleum and working together with key partners, we have no doubt that this transition will pick up pace faster than envisaged,” said Serem.

He added that the rollout will be used to develop a blueprint for the conversion of the company’s fleet from Internal Combustion Engine (ICE) to electric vehicles as well as advice broader strategies on similar trends in the market by other players. This will also enable the company to save on fuel and maintenance costs, thus creating value for shareholders.

“The EV revolution is here with us. Countries around the world are racing to phase out gasoline and petrol cars. France, England, Norway, India, China, USA, and the Netherlands are leading with either a goal to stop the sale of internal combustion engines by 2050 or have significant EV sales,” said Mr. Serem.

In 2012, the Company embarked on a diversification agenda. KenGen is already offering consultancy and geothermal drilling services in Ethiopia and Djibouti. In the long run, the adoption of EVs will drive up power demand and is also envisioned to boost the Company’s revenues by way of selling more electricity to power transportation.

Already, KenGen said it has two EV charging stations in Nairobi and Naivasha and plans to install an additional three by end of 2023 in Murang’a, Embu, and Kisumu Counties within the company’s power plants. The charging stations are not open to the public as they are being utilized for internal piloting and data collection before the commencement of commercial rollout.

The lucky winners of the ‘Twende Qatar na Odibets’ promo on Thursday, November 24, departed the country for Qatar.

Kenya’s leading betting firm launched the promo in September announcing they would be taking their loyal fans to Qatar for a lifetime experience.

Those who departed the country for the Middle East country on Thursday include both winners and influencers.  

The winners include; Benjamin Ogoti, Amos Kimutai, Robinson Daniel, Hilter Rikoi, Jonam Indeke and Robert Odinga.

This comes barely a week after Sports commentator Fred Arocho and Jacky Vike, popularly known as Awinja delivered tickets to the winners last week.

Awinja delivered the ticked to Mr. Ogoti who is in the first batch heading to Qatar courtesy of Odibets.

Just like Ogoti, you can also be a winner. Odibets has one of the best Odds for the ongoing World Cup in Qatar.

Place a multibet of 5 or more teams with Ksh 99 and total minimum odds of 5.9 then you stand a chance of winning a trip to Qatar.

Odibets will also sponsor its customers to other top world destinations like the USA, England, Spain, Brazil among others, to enjoy once-in-a-lifetime experiences.

International Youth Foundation (IYF) and Google.org have joined hands to provide young individuals in South Africa, Kenya and Nigeria with digital and entrepreneurial skills to enable them secure alternative sources of livelihood.

IYF South Africa with the support and funding of Google.org is currently deploying various programs for young people in the three African countries, which has had an impact in providing them access to digital and entrepreneurial skills.

Through its high impact training,  IYF South Africa is making a substantial contribution to enabling young people with key skills to develop their entrepreneurial skills through continuous investment made by organizations in IT across all sectors.

Since its inception 30 years ago, IYF has been able to reach 7.7 million young people while working with more than 600 local partners in over 100 countries.

Participating youth are taught business, technical, and life skills as part of the Skills for Success (S4S) program. This will result in an increased demand for highly skilled youth in the IT sector as well as the move towards development of curricula that reflects constant innovation and change that is occurring in the IT field, as a result young people will need IT skills to be successful in a variety of careers.

The IYF is cultivating future industry leaders in Africa as graduates from this program emerge with improved skills, which increase their employability.

In addition, Skills for Success is positively changing lives and communities through its placement partners, who provide work opportunities for newly qualified youth.

Speaking on the program, IYF SA’s Country Director, Anusha Naicker, asserts, “The entrepreneurial component of the program provides guidance and business acumen that are essential for business success.

As a result, there is growing confidence among young African entrepreneurs that they can start a business that solves many of the challenges facing their communities.”

Entrepreneurship is marked by job creation rather than job seeking and is one of the most sought-after career paths for young people.  The entrepreneurial career path creates meaningful and rewarding opportunities for youth and is therefore a great way for the young generation to explore their areas of interest.  Entrepreneurship offers innovative solutions for economic growth and can be a powerful tool to help fight youth unemployment, particularly in developing countries.

“This program taught me the basics of UX design, the design thinking process, how to build prototypes for testing with users, conduct UX research, and design responsive websites. With this knowledge, my design skills keep improving daily, and I can see myself making a living doing what I love,” says Diane Shamaki, a learner from Nigeria (Paradigm Initiative).

Sub-Sahara Africa has the youngest population in the world, in the next 30 years, 60% of Africans will be under the age of 25. Having a young population brings many opportunities for economic growth and innovation, if these opportunities can be recognised and utilised.

Youth demonstrate the necessary qualities and mindset to succeed as entrepreneurs, their intuitive ability to navigate technology makes entrepreneurship an ideal career option, given the impact technology will have on entrepreneurial growth.

To succeed as entrepreneurs, they often need to complete training to develop competencies and skills. Skills development programs that offer skills training and could be applied after completion of the program are highly attractive to youth. These programs are one of the avenues used by youth to rise above poverty, inequality and barriers to opportunity, transforming and upskilling Africa.

Given that unemployment is on the rise in Sub Saharan Africa, young people are becoming more robust in seeking alternative opportunities to secure livelihood.

Many learners have pursued entrepreneurial career paths after completing the program, with at least 40% finding employment in all three countries. It takes perseverance, networking skills, and passion to succeed as a young African entrepreneur. Undoubtedly, entrepreneurship is a powerful tool for empowering young people by celebrating their creativity and technological aptitude.

Entrepreneurship among youth is praised not only for its ability to create jobs and empower young people but also for its ability to integrate young people into society, especially those with fewer opportunities.

In addition to providing young people with the necessary skills and experiences to thrive economically, youth entrepreneurship also contributes to their countries’ prosperity.

A powerful tool for addressing the rising youth unemployment rate is using micro, small, and medium-sized businesses, which make up 95% of all firms and create 80% of all jobs in Africa.

The micro, small, and medium enterprise sectors include a significant portion of young entrepreneurs. The World Bank claims that young people frequently work in sectors that are expanding quickly and are more likely to hire their peers. When youth-led businesses have the right knowledge, skills, mentorship, funding, and supportive policies, they can grow economies and create jobs.

IYF is honoured to contribute to fostering the conditions necessary for young people to engage in entrepreneurship and raise living standards in their communities and families.

Kenya and South Korea business organisations have signed a partnership agreement to fast track trade and investment.

They agreed to pursue development-oriented policies that support job creation, entrepreneurship, creativity, innovation and encourage the growth of Micro, Small and Medium Enterprises.

The agreement also seeks to promote effective Public-Private Partnerships and address youth unemployment.

The deal was signed by the Kenya National Chamber of Commerce and Industry (KNCCI), the Korea Institute of Procurement and South Korea’s SDG Youth.

President William Ruto said Kenya has created an enabling environment to attract investors.

He welcomed the South Korea business community to invest in major projects in transport, infrastructure, agriculture, health and ICT in Kenya.

Kenya, he added, had put in place laws to facilitate Public-Private Partnerships.

“Kenya has tremendous human talent. You can get any skill you need.”

President Ruto was speaking in Seoul, South Korea during a business forum to unlock trade and investment opportunities between Kenya and South Korea.

The organisations also agreed to prioritise investments that will fast track the realisation of the United Nations (UN) 2030 Agenda for Sustainable Development.

The National Bank of Kenya (NBK) announced a Ksh.2 billion education programme with target to up-skill Infrastructure development, leadership capacity building, innovation in learning, Energy and Water provision, Digitization and ICT Infrastructure as well as Asset Financing for schools.

The programme was launched Tuesday in partnership with Elimu Connect towards the support of the education ecosystem within both primary and secondary schools in the country.

NBK also announced financing partnership with Kenya Private Schools Association (KPSA) and UNIFIED Alternative Providers for Basic Education and Training (APBET) Schools Association-Kenya.

It entails financing to support key components of quality education including quality and sufficient infrastructure development, sustainability in energy & water, ICT infrastructure & learning programs, working capital, and Asset financing. National Bank will finance projects to member schools at 11 percent in a bid to support them achieve quality and excellence in learning for both Primary and Secondary schools.

Speaking at the launch, Mr. Peter Kioko, the Acting Managing Director at NBK noted that the bank understands the challenges encountered in the education sector and therefore the need to create a tailored offering that contributes to Sustainability Development Goal 4 by ensuring inclusive and equitable quality education and promote lifelong learning opportunities for all in Kenya and the World at large.

“The NBK Elimu Konnect program seeks to address the challenges in the enablement of the Education sector in Kenya with a view to capacity building, financial enablement, technology improvement, innovation and excellence in learning, said Peter Kioko, Managing Director, NBK.

Elimu Konnect creates a collaboration between different partners in the education sector including Kodris Africa for a Coding for Schools platform. Notably Kodris Africa will provide a 20 percent discount to the schools funded through the NBK– Private Schools partnership.

The bank will also provide financing for energy and water needs through its MajiKonnect program by supporting the drilling of boreholes and ensuring solarization for energy including Solar Panels for lighting, water heating and powering E-learning gadgets. This will reduce overheads related to power, and support digitization programs while still promoting sustainability on climate.

“We are happy to have a financial partner that is focused on supporting the education ecosystem to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.  We will work together with NBK and other like-minded partners such as Kodris Africa towards affordable financing, technical assistance, technology in schools and capacity building for our member institutions,” said Kenya Private Schools Association (KPSA) chairman Charles Ochome.

NBK will also facilitate the digitization of school technologies and the development of ICT infrastructure.

KPSA and APBET Schools Association-Kenya are umbrella bodies for private schools playing a key role in complementing the Government’s efforts in the provision and expansion of access to quality education for all.

Family Bank Group has recorded a Ksh.3.5 billion Profit Before Tax for the first nine months of 2022 up from Ksh. 2.6 billion recorded in a similar period in 2021, marking a 33.2% growth in earnings.

The growth was primarily driven by strong partnerships and an increase in non-interest income. The Group’s loan book expanded by 22.7 percent to Ksh.79.8 billion while customer deposits increased by 13.8 percent to Ksh.92.7 billion in the period under review.

Total non-interest income increased by 22.4 percent to close at Ksh.2.7 billion for Q3’2022. Supported by a strong capital base, the balance sheet size grew with total assets increasing by 19.9 percent closing at Ksh.128.5 billion.

“As a Bank, we continue to create a healthy operating environment that provides consistent growth and profitability to our customers as we build a sustainable business that goes beyond profit,” said Family Bank CEO Rebecca Mbithi.

 Net interest income increased by 9.8  percent to Ksh.6.2 billion, supported by an increase in interest income on loans and advances and government securities which grew by 16.6 % and 40.7 % respectively.

Similarly, non-funded income increased by 22.4 percent from Ksh. 2.3 billion to Ksh. 2.7 billion for the period under review with income from fees and commissions registering a decline of 50.1 percent to stand at Ksh.84.6 million.

Total operating expenses slightly increased by 3.6 percent to Ksh.5.5 billion from Ksh.5.3 billion. Loan loss provisions registered a 42.1 percent reduction to close at Ksh.469.6 million.

This year, the Bank has partnered with Aqua For All to incentivize targeted lending for eligible community-based water service providers (CWPs) in Kenya covering a portfolio of Ksh.350 million.

Under this program, Aqua for All shall provide a first loss grant to cover net losses resulting from a portfolio of qualifying loans in the unsecured Maji Plus product for CWPs. In addition, the Bank acquired Ksh.1.2 billion from Eco-Business Fund to increase access to finance for sustainable agricultural producers, particularly in the tea sector and Ksh.1.2 billion additional funding from Resp0nsability to deepen credit access to Small and Medium-sized Enterprises (SMEs).