In mid-April, the Central Bank of Kenya announced the publication by Gazette Notice of the Credit Reference Bureau Regulations, 2020 (CRB Regulations), to replace the Credit Reference Bureau Regulations, 2013 with an aim of strengthening Kenya’s Credit Information Sharing System (CIS).
One of the key reforms touched on SACCO societies regulated by the Sacco Societies Regulatory Authority (SASRA). Under the new reforms, these institutions are now authorized subscribers of credit data to CRBs, as the can now submit borrowers’ information to CRBs and also receive credit reports directly from them. Previously, SACCOs were obligated to share positive credit information among themselves but only share information with CRBs under the third parties’ category. The category had to seek prior approval from the regulator and obtain consent from their customers before sharing the credit information.
The Senate has approved a bill that will make it mandatory for these SACCOs to share credit information of their customers whether positive or negative with licensed CRBs directly. This proposal will amend a section of the SACCOs act to align with the Banking Act and the Microfinance Act, that bind formal financial institutions.
“A SACCO society shall, in the ordinary course of business exchange information on performing and non-performing loans as may be specified by the authority and to such extent as may be prescribed through regulations made under the Act,” read the bill in part.
But they will follow the law on pre-listing and post-listing notices to their customers. The Bill also proposes the registration and licensing of SACCOs as deposit-taking savings and credit co-operatives. If this Bill is assent into law, these deposit-taking SACCOs will have a Year to comply with the new law.