Kihara Maina

CEO's Profile

Theme | Credit Scores and Access to Credit
Topic | Factors that Influence Personal Credit Scores and Household Borrowing
MONTH | February 2020

Discussion Focus Area:

  • Risk-based pricing in banking

  • Industry initiatives to de-risk borrowers, enhance access to credit


According to KIPPRA, domestic trade which includes wholesale and retail activities contributes about 10 per cent to Kenya’s GDP. The sector is a significant source of job creation, accounting for approximately 16 per cent and 60 per cent of the country’s formal and informal employment, respectively. Externally, Kenya has been dominant in the export of agricultural commodities, textiles and apparel. Through enabling policies and increased investment to expand domestic, regional and international trade, there are opportunities to sustain growth of the sector.The banking industry, through the Kenya Bankers Association, has continued to champion initiatives geared towards promoting financial inclusion by facilitating access to credit for all sectors of the economy. The initiatives include the Inuka Enterprise Programme, which has continued to build capacity among MSMEs. Launched in 2018, the free-of-charge programme features modules designed to enable participants to run their businesses more efficiently, enhancing credit levels of access to formal credit. Online platform

Meanwhile, the industry has been on the forefront in creating products customised for MSME clients, inspired by the unique needs of the enterprises. It is the ambition of the banking industry to continue facilitating enterprise development because thriving businesses are the building blocks of a vibrant economy.

The aim of these interventions is to address both the cost and access to credit. From 2016 to 2019, the industry grappled with the limitations induced by interest rate caps, particularly in the area of risk-based pricing. With the removal of interest rate controls, the industry has continued to champion risk-based pricing. This means that banks can price loans in line with a borrowers’ risk profiles, enhancing access to credit.

A component of risk-based pricing models and the credit information sharing mechanism, credit scoring is a key focus area for borrowers from both the perspective of pricing and access to the various products offered by banks.