crb, revolutionizing the credit market · 2016. 11. 24. · application of crb clearance q.6: under...

Confidential | Internal use only

BY ISAIAH OPIYO

CRB, REVOLUTIONIZING THE CREDIT

MARKET

29 JUNE 2016

INTRODUCTION

1. What was your first encounter

with a CRB?

2. How was the experience?

3. What is your perception about

CRB?

Isaac receives a text from his Bank

Notice of Review of Interest Rate on Loans“Dear customer, as a result

of the increase in KBRR,

effective 8th August, your

monthly loan repayment will

increase,”

Isaac’s reaction!Oh, how does this bank expect me to

increase my loan repayment yet I

have no extra income left to commit?

No need to worry, I will just go ahead

with my usual monthly loan

repayment.

3 months laterHello Isaac, this is to notify you

that your loan account is in

arrears of 3 months. Should you

fail to settle the arrears by today,

we will have no option but to

submit your default info to CRB

for adverse listing as required by

law.

YOUR CONSUMER RIGHTS UNDER CRB REG 2013

Did you know that your

right as a consumer are

protected in the CRB

Regulations 2013?

Highlight of Consumer Rights

1. What information can be shared

2. Confidentiality

3. Accuracy of info shared

4. Your right to dispute the information

shared

5. The right to access your info from

CRB

YOUR CONSUMER RIGHTS

1. Prohibited Information

2. Consent to share customers info with CRB:

3. Notice to submit Info to CRB

4. Confidentiality

5. CRB to verify accuracy of info submitted

YOUR CONSUMER RIGHTS

6. Right to Dispute info

7. Accuracy of Information

8. Inaccurate information

9. Post Listing Notice

10. Deletion of adverse info after expiry of 5

years after final settlement.

WHAT TYPE OF DEBTOR ARE YOU?

1. Able and willing to pay e.g good borrowers

2. Able but Unwilling to pay e.g. adamant

HELB beneficiaries

3. Unable but willing to pay e.g. a borrower

who has lost a job

4. Unable and Unwilling to pay e.g. HELB

beneficiaries who are still job seekers

PITFALLS FOR ADVERSE LISTING

1. Abandoning a bank account that attracts

monthly ledger fees

2. Breach of a standing order

3. Failure to pay the ATM Application fees

4. Issuance of bounced cheques

5. Failure to adjust monthly repayment

6. Failure to repay mobile loans.

WHAT HAPPENS WHEN YOUR BANK COLLAPSES

Hello Irene, have you

heard the news from

CBK regarding the

collapse of Imperial

Bank Ltd?

BREAKING NEWS: IMPERIAL BANK COLLAPSES

I know I owe them

Ksh.380,000 which I

borrowed. Now that it has

collapsed, I cant pay and

wont pay!!!!!!!

Misconceptions1. Any outstanding loans are written off when the

bank collapses

2. The loans are terminated and so no need to repay

3. Borrowers are supposed to stop repaying the

loan until the collapsed bank is operational again.

4. Such loans are not recovered since there is no

one to claim for them.

5. The loans should be repaid immediately in full

when the bank collapses.

What to Know as a borrower

Information on the loans are still shared with credit

reference bureaus by Kenya Deposit Insurance

Corporation (KDIC).

All outstanding loans of collapsed banks are payable to

Kenya Deposit Insurance Corporation (KDIC).

All outstanding loans recovered are received by Kenya

Deposit Insurance Corporation (KDIC).

Kenya Deposit Insurance Corporation (KDIC) has all the

information on all assets and liabilities (outstanding

loans) of collapsed banks.

List of Collapsed lenders under KDIC

Dubai Bank Ltd

Imperial Bank Ltd

Kenya Finance Bank Ltd

Pan African Bank Ltd

Pan African Credit &

Finance Ltd

Prudential Bank Ltd

Middle Africa Finance

Prudential Building

Society

Postbank Credit Ltd

Ari Bank Corporation Ltd

Heritage Bank Ltd

Meridien BIAO Bank Ltd

Trust Bank Ltd

Central Finance Ltd

Inter Africa Finance Ltd

Nairobi Finance Ltd

Reliance Bank Ltd

Euro Bank Ltd

Fortune Finance Ltd

Trade Bank Ltd Thabiti

Finance Co. Ltd

Daima Bank Ltd

Now I have to work on

how to repay the loan

even though the bank

has collapsed

OPTIONS AFTER ADVERSE LISTING

1. Settle the outstanding amount in full

2. Activate your NPL account

3. If inaccurate, pursue dispute resolution

4. Obtain CRB clearance certificate to access

loans

APPLICATION OF CRB CLEARANCE

Q.1: What is CRB Clearance?

Q.2: Where is CRB Clearance applicable?

Q.3: Never borrowed, can I still get CRB

Clearance?

Q.4: I have defaulted and I have not settle the

arrears. Can I still get Clearance?

Q.5: I am still servicing a loan, can I get CRB

Clearance?

APPLICATION OF CRB CLEARANCE

Q.6: Under what scenario is CRB Clearance

not applicable?

Q.7: I paid for CRB Clearance Certificate but

my name is still in CRB

Q.8: Why Do I need to pay Ksh.2,200 for CRB

Clearance?

Q.9: How long is CRB Clearance Valid?

FUTURE OF THE CREDIT MARKET

1. Rollout of mobile loans and platforms for

consumer loans

2. Improved turnaround time

3. Use of CRB for KYC purposes

4. Use of CRB analytical tools for collection

prioritization

5. Use of credit scoring for credit decisioning

WHAT IS CREDIT SCORING?

Rate credit risk of the following category:

1. Politicians

2. Lawyers

3. Debt collectors

4. Relatives and friends

5. Bankers

6. Pastors

WHAT IS A CREDIT SCORE?

1. It is an arithmetic number that indicates

the credit risk of a borrower

2. It summarizes all the information contained

in the report to a number

3. It makes it possible to automate the credit

decisions

Illustration using KCSE results

Thank You