CENTRAL BANK OF KENYA
Closing Remarks by
PROF. NJUGUNA NDUNG’U
GOVERNOR
FIRST ANNUAL MEETING OF THE ASSOCIATION OF KENYA CREDIT
PROVIDERS
Kenya School of Monetary Studies
Tuesday, November 19, 2013

Mr. Habil Olaka, Chief Executive Officer, Kenya Bankers Association;
Ms. Marianne Ndegwa Jordan, Chief Executive Officer, Kenya Tourist
Development Corporation;
Mr. Timothy Tiampati, Acting Chief Executive Officer, IDB Capital
Ms. Mercy Njeru, Chief Executive Officer, Kenya Rural Sacco Societies
Union;
Chief Executive Officers of licensed Credit Reference Bureaus;
Representatives of FSD Kenya and USAID FIRM;
Representatives of SASRA;
Representatives of various credit provider institutions;
Ladies and Gentlemen:
I am pleased to note that you have just concluded the first Annual General Meeting
of the Association of Kenya Credit Providers (AKCP). I wish to congratulate the
entire membership and particularly the Secretariat and the newly appointed
Governing Council for this milestone in the evolution of the credit information
sharing program. Indeed it is gratifying to note that since the launch of the
Association at the CIS Regional Conference slightly over a month ago, some
progress has already been made. The new Association is already settling in well at
KSMS, which attests to the commitment of the Central Bank in playing its part in this
very important initiative of sharing credit information by more credit providers.
As you embark on implementing the objectives for which you have been set up, I
wish to challenge you to strive to observe, from the very outset, the General
Principles for Credit Reporting developed by an internationally representative
taskforce of the World Bank and the Bank for International Settlements. The report
issued jointly by the two bodies describes the nature of credit reporting elements of a
credit reporting system that is safe, efficient and reliable. The report which consists of
5 General Principles, 5 Roles of Key Players and 5 Recommendations for Effective
Oversight are a good reference for credit reporting systems’ policy and oversight. I
encourage you to familiarise yourselves with those principles and strive to achieve
full compliance. But in addition, there are country specific or peculiar characteristics
that could be added to reflect our country characteristics and environment.

Ladies and Gentlemen, allow me to lay some emphasis on the first of the 5
General Principles that I believe speaks well to the mandate of AKCP. It states that:
Credit reporting systems should have relevant, accurate, timely and
sufficient data—including positive — collected on a systematic basis from
all reliable, appropriate and available sources, and should retain this
information for a sufficient amount of time.
Achievement of this principle will call for the collective contribution of all parties here
today. The Governing Council and the Secretariat will need to work together to
support various credit providers who sign up to share data. Good quality data will
guarantee that the risk management tools and models developed from the data
trends are robust and reliable. This way, the credit granting process will become
more refined and more efficient. Lenders will soon move away from mere use of
‘gut feeling’ or other rudimentary forms of information gathering that are unreliable
and costly to assemble.
By paying attention to maintaining high quality data in the credit reference bureaus,
the players will also minimise contentions by borrowing customers as every effort
must be made to address customer complaints on data accuracy. All lenders need to
appreciate that the first port of call in resolving customer complaints must always be
within the lending institution itself. Where disputes cannot be settled internally,
institutions must bring them to the attention of an industry mediation process. In this
connection, I am pleased to note that the AKCP Secretariat has put in a lot of work
towards developing a CIS Dispute Resolution Handbook. The AKCP Secretariat will
soon be ready to conduct a public launch of its Alternative Dispute Resolution
Mechanism and create awareness on the out-of-court settlement process. This will
mark an important step towards adding credibility to the CIS process. Central Bank
is ready to provide required support needed to make this launch a success.

Ladies and Gentlemen: I now wish to turn to the important role of AKCP in
contributing to policy and legal reform. The 4th of the General Principles for
Credit Reporting states that:
The overall legal and regulatory framework for credit reporting should be
clear, predictable, non-discriminatory, proportionate and supportive of
data subject and consumer rights. The legal and regulatory framework
should include effective judicial or extrajudicial dispute resolution
mechanisms.
While we recognise that the role of formulating a robust legal and regulatory
framework remains with the Regulators, the Central Government and Parliament,
we would like to forge a partnership with industry players in achieving this important
function. We therefore encourage you to form relevant committees that will consult
with, and make proposals to, the Regulators in matters of CIS. Due to the
multiplicity of Regulators involved, I urge the Secretariat of AKCP to liaise with the
Domestic Regulators Forum using CBK to introduce CIS as an agenda item in the
Forum’s meetings.
With these few remarks, I wish to once again congratulate the officials of AKCP that
have been elected today and assure you of the support of the Central Bank.
Thank You!