Credit reference bureau (CRB) is an institution licensed by the central bank of Kenya with the mandate to access borrower information to rate and categorize them. Its main objective is to determine how credible one is to get a loan and share the information with the lenders.
As much as this information can be helpful to the lender, it might not be as credible and reliable as it should be. Some reason that would bring out good borrowers as bad include:
Unintended errors can happen where one gets listed despite having cleared their loans. Victims of such cases will get difficulties getting credit in Kenya from lenders simply because their previous lenders accidentally listed them as non-payers. The borrower, in this case, might even never know they are listed until they try borrowing again.
Unseen occurrences and disasters can lead to late or no payment by customers. People borrow money for different reasons. Some, for example, to start or to boost their businesses and when accidents such as fire happen, the source of money to repay the loan is unavailable leading accumulative arrears. This is one of many situations that CRB doesn’t consider when rating borrowers, making it an incredible way of rating borrowers.
As little as a debt ten shillings is enough amount of money to have you listed. If you repay all the money whether hundreds of thousands or millions and not pay as little as ten shilling you can be listed by the CRB as a defaulter.
This will put the customer on the same list as those who have not paid up to millions of money making it very unfair. As much as the bureau says it rates its customers, the truth is that you’re either listed or not. A very inefficient method to weigh borrowers.
Unawareness of how the payment should be done cannot be ignored. Customers may borrow, have the money to pay by the end of every instalment but lack knowledge of when to make the payment. As rare as it is some customers may misunderstand the way should make their instalment.
if for example a customer is supposed to make payments monthly but instead understands that it should be after two months, CRB will receive the information that they are late payers.
CRB was created to profile borrowers, a system that was to be used to score borrowers and blacklist defaulters. At the time the system seemed fair to borrowers and was an answered prayer to lenders. CRB has however turned into an incredibly inefficient system to blacklist every single borrower, those who deserve it and those who have been a victim of an inefficient system.