Speech by Julius Mokogi, MD, KIE During the Signing of MOU with Metropol

LADIES AND GENTLEMEN GOOD MORNING!

It gives me great pleasure to welcome you all to witness the Signing of Memorandum of Understanding between KIE and Metropol Credit reference Bureau.

Kenya Industrial Estates is a wholly owned government corporation established in 1967 as a subsidiary of ICDC. The Company gained autonomy in 1978. The core activities of the company which have been executed successfully over the period include; provision of industrial work space, provision of credit facilities, business advisory services and facilitation of inter firm linkages.

Achievement of the above has not been without challenges since many small and medium enterprises in the early days went into business ill-prepared and therefore many defaulted in their debt settlement obligations.
To address the challenges, SME rating programs have been put in place by business rating agencies who have been working closely with financial institutions and SME's alike to forestall possible loses occasioned by lack of dependable data on the subject firms at the point of engagement lenders.

A credit bureau is a critical part of the financial infrastructure of any country and therefore by partnering with Metropol Credit Reference Bureau, immense benefits are envisaged. These include but not limited to:

  • Enabling credit information sharing within and across industry;
  • Rapid access to accurate and reliable standardized information on potential borrowers;
  • Strengthen the evaluation of credit risk more and reduction of lending, processing time and costs. This in turn promotes profitability and increased credit activity;
  • Encourage responsible use of credit;
  • Enhance implementation of best global practice;
  • Reduce bad debts;
  • Improve customer profitability;
  • Identify speedily potential fraud.

Whereas the process to build a new loan book shall continue to observe the best lending practice, the company shall tap from the partnership the service of listing defaulters for the purposes of sharing information with other lenders in the market. This however, this shall happen upon service of clear notices to the affected debtors.
It is therefore important for debtors to understand the consequences of the negative reporting on them as borrowers and their businesses.

The ultimate objective of the partnership shall be to facilitate provision of hassle free credit in the market and where necessary to offer these much needed facilities to SME'S based on business ability to support credit as opposed to security driven approach.

Thank you.