According to a report compiled by the Central Bank and the Kenya National Bureau of Statistics, more than 14 million Kenyans take loans from financial institutions.
While these loans enable individuals to finance their businesses and cater to their day-to-day expenses, lenders collect their credit information and submit them to CRBs.
Other lenders or lending institutions can access the credit information to determine the borrower’s creditworthiness.
Ideally, if you pay your loans on time, you’re positively listed on CRB.
On the other hand, if you default on your loans, you’re negatively listed on CRB.
What is a CRB?
CRB stands for Credit Reference Bureau.
It’s a private institution approved and licensed by the Central Bank of Kenya (CBK) to collect, store and manage credit information of individuals and businesses and provide the information, upon request, to lending institutions like banks, micro-finance institutions and mobile lenders.
- TransUnion (CRB Africa)
- Metropol Corporation
As hinted above, when it comes to CRB listing, you can either be positively listed or negatively listed.
Let’s focus on the first case because it is the most confusing…
So, what is a positive CRB listing?
There is a misconception in Kenya that when you’re listed in CRB, you’re blacklisted because you’ve defaulted on a loan.
This has led to fear of being listed on CRB.
A CRB listing simply means that you’ve taken a loan and your credit information is available on a CRB database.
If another lending institution wants to ascertain your creditworthiness before extending a loan to you, they simply check the CRB database.
So, a positive listing means you have not defaulted on any loan or you have a running loan that you haven’t defaulted on.
This is different from a negative CRB listing, which implies that a lending institution has reported you for defaulting on a loan.
Ideally, a negative CRB listing means you have a record of defaulting on loans.
It’s important to maintain a positive listing in CRB because lending institutions look at your credit report before giving you a loan.
If you have a negative credit report, lending institutions will not give you a loan. So, ensure to pay your loan on time when you take one.