A Publication of Credit Information Sharing Association of Kenya (CIS KENYA) CIS highlights from the 2015 budget Court mandated mediation CIS Kenya participation at the ASK Show
1 CIS Kenya Digest Editors note Change cannot and will not happen overnight, but the intent to evolve Will produce opportunities for growth. Robin. D Hart. Welcome to the first edition of the CIS Kenya Digest, published by Credit Information Sharing Association of Kenya. Formerly known as Association of Kenya Credit Providers (AKCP), we have undergone a rebranding exercise that will see a new era in the development of Credit Information Sharing in Kenya and regionally. Our evolution has been necessitated by the need to better align our name to our mandate. We go forth from here with a re-energized interest in seeing: Increased participation in the mechanism by different lending sectors A more informed mwananchi who appreciates that the mechanism is affecting their lives and that they can harness it to their personal advantage. Increased resolution of disputes amicably handled at the CIS Alternative Dispute Resolution Centre Growth of knowledge in the area of credit risk management. The CIS Kenya Digest is a bimonthly publication that will share industry news, highlight involvement of key persons and organizations and discuss findings of knowledge generation activities. I hope that you find this publication relevant and useful. Get involved and engage with us, help us foster an atmosphere where our vision can be accomplished. Towards a more open credit market Cheers Everlyne Oloishorua Communications Desk CIS Kenya Located at the Kenya School of Monetary Studies Mathare North Road, off Thika Road, P.O. Box 65041 00618 Ruaraka Nairobi, Kenya Tel: +254 20 2652308 (wireless) Tel: +254 20 864 6267/215 Email: info@ciskenya.co.ke www.ciskenya.co.ke
CIS Kenya Digest 2 Industry news Introduction of Full file sharing amongst SACCO s On 11/6/2015, Mr Henry Rotich, the Cabinet Secretary (CS) for Kenya s National Treasury, read the national budget for the year 2015-2016. In his statement, the CS made several legal and policy reform proposals. Among these, he proposed certain changes in the regulation of Deposit Taking Savings and Credit Co- operative Societies (DT SACCOs). In order to strengthen the supervision of Deposit Taking Sacco Societies by the Sacco Societies Regulatory Authority (SASRA), he proposed to amend the Sacco Societies Act to allow SASRA to vet directors and key officers of DT SACCOs. Additionally, he proposed to extend the information sharing requirements for SACCOs to include sharing of positive information; and to share with other the wider credit market. This will see increased participation from the SACCO sector which will enrich the CRB databases. Prior to this announcement, CIS Kenya had since 2013 began preparatory work with the SACCO sector for the implementation of CIS. During this time, flaws were noted in legal framework supporting CIS for SACCOs. Working with SASRA, KUSCCO and KERUSSU, we have been lobbying for amendments. This inclusion to the budget speech shows that our efforts are not in vain. We are hopeful that these proposals will be added to the Amendment Bill to allow SACCOs share full file information. Mr Henry Rotich, the Cabinet Secretary for Kenya s National Treasury
3 CIS Kenya Digest Legal & ADR Court Mandated Mediation In contributing to the 2015 Doing Business Report, the Government through the Ministry of Industrialization has promoted Court Mandated ADR. Speaking at a breakfast organized to assess the progress of Kenya s ranking in the Ease of Doing Business Report, Hon. Justice Fred Ochieng encouraged Kenyan businesses to inculcate the use of ADR mechanisms as part of their business culture in settling disputes other than the traditional litigation process. He noted that about 90% of cases handled at the commercial courts could be easily and amicably resolved through Alternative Dispute Resolution mechanisms such as negotiation, arbitration reconciliation and mediation. He stated that the Commercial courts will soon refer all cases to an ADR process before being escalated at the court if still unresolved. of backlog in the Judiciary. On the other hand, the litigants would exercise their constitutional right to have their disputes resolved in an expeditious, cheaper manner which attends to matters further than the scope of the judicial system. The sentiments of Hon. Justice Fred Ochieng reflect the vision of the CIS ADR centre. It was established to settle disputes in the CIS mechanism and has successfully resolved 95% of the disputes it has received. The ADR centre has been well received by corporate entities but anticipates a bigger uptake of its services from the members of the general public. The centre taken advantage of the ASK shows to create awareness of its existence and purpose to resolve CIS disputes. He reiterated the benefits of ADR to both the Judiciary and the litigants noting that the use of ADR breathes life into resolving the issue Justice Fred Ochieng, Head, Commercial and Admiralty Division of the High Court
CIS Kenya Digest 4 CIS Kenya Participation in the ASK Shows CIS Kenya seized an opportunity to create awareness on the CIS mechanism and the ADR centre through the Agricultural Society of Kenya (ASK ) shows hosted in Nakuru, Kisumu, Nyeri and Mombasa towns. The ASK Show theme this year has been enhancing technology in Agriculture and Industry for Food Security and National Growth. These ASK Shows are regional and target populations from rural areas. The theme is relevant to CIS Kenya seeing that: for there to be technology around agriculture and industry there is most likely a backing from financial institutions. Exhibiting at the Central Bank of Kenya stand, the strategy of our participation was to sensitize the public on the need to repay their credit facilities to enhance their chances of improving their credit scores. The show also attracted a number of financial institutions drawn from the Banking, Microfinance, Saccos, and DFIs who offer credit to the public. CIS Kenya engaged in awareness creation by targeting random customers of the financial service providers and their products. CIS Kenya stand generated a lot of interest from the public which has strengthened the resolve to use these shows as a tool of communication in reaching out to consumers of credit.
5 CIS Kenya Digest CIS Technical Training One of CIS Kenya s strategic priorities is building capacity amongst institutions to effectively use the credit information sharing (CIS) mechanism. Of keen interest to the Association is ensuring that data submitted to the credit reference bureaus (CRBs) is of high quality. Through its compliance role, CIS Kenya receives statistics of data submission from the CRBs, and has noted a need to build capacity on automated data extraction and submission. In 2014, CIS Kenya began working with the SACCO sector to prepare them for sharing. A capacity assessment on the readiness of SACCO s to share data was conducted and a dissemination workshop held in May 2015. The assessment demonstrated the need to build capacity amongst SACCO s especially in the extraction and submission of data tot eh CRB s. In August 2015, CIS Kenya conducted its first technical training which majored on basic skills in the data extraction language - SQL. The training had over 70 participants attend drawn from CIS Kenya s membership. The aim was to equip credit and ICT personnel with data extraction skills that should see improved quality of data submissions. Most participants expressed their satisfaction on the training and hoped that a subsequent training would be offered in the near future.
CIS Kenya Digest 6 CIS Upcoming Events 16-17th September 2015 Villa Rosa Kempinski Transunion Credit Scoring Training www.tutraining.site 22-23 October 2015 Kenya School of Monetary Studies Understanding, Interpretation and Use of Credit reports and Credit Scores New Staff < Everlyne Oloishorua Communications Desk < Erick Onderi Alternative Dispute Resolution Centre Deputy Registrar < Tobias Sweta Accountant
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