Press Releases

IFC Says New Credit Law in Kenya Will Ease Access to Finance for Businesses

In Nairobi:
Makena Mwiti
Phone: +254 728 608 908

In Johannesburg:
Daniel Musiitwa
Phone: +27 11 731 3175

Nairobi, Kenya, August 26, 2008—IFC, a member of the World Bank Group, today stated that the Kenyan government’s new regulations for credit bureaus will ease access to finance for small and medium enterprises in the country.

IFC advised the government and other stakeholders on developing the new regulations and shared best practices on credit referencing and regulations. IFC also facilitated a study tour to South Africa for Kenyan government and banking officials.

Launched in July 2008 by Kenya’s Minister of Finance, the credit reference bureau regulations provide guidelines for licensing and establishing credit bureau operations. They also define consumer protection rights and make it mandatory for financial institutions to report nonperforming loans. They will become effective in 2009.

“With the announcement of the regulations, the Central Bank of Kenya will begin receiving applications from viable credit bureaus and issuing licenses. We will also supervise the credit bureaus,” said Rose Detho, Director of the Central Bank of Kenya’s Banking Supervision department. “The new regulations will guide the credit information-sharing system and help identify serial loan defaulters, who account for most nonperforming loans. This will allow banks to lower the price of credit facilities for borrowers with good credit.”

“By making it mandatory for banks to share information, the regulations strengthen earlier amendments to the banking act. They also enable private credit bureau operators to apply for licenses to offer their services to the banking sector,” said Wachira Ndege, Chairman of the East Africa Credit Bureau Association.

“Credit bureau operations are vital to building the confidence of the banking sector and for facilitating access to finance for small businesses,” said Jean Philippe Prosper, IFC Director for Eastern and Southern Africa. “The new regulations will provide a framework for a reliable system of credit information sharing, which should give banks more confidence to lend to smaller business.”

Research shows that credit bureaus are critical to expanding credit for individuals and small businesses, and that credit reports increase the quality of credit decisions, while providing significant risk mitigation and minimizing fraud.

About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit