Expanding lending to Agriculture
through CIS
Jared Getenga
Fin4ag
AFRACA 2014
Synopsis
• Problem: Agricultural SMEs unable to access credit
• Cause: Higher level of information asymmetries
compared to...
Evidence of the problem
Banking sector statistics
Empirical evidence
Bank sectoral lending – 2013 &2014
Comparison between Agriculture and Personal
financing
Evidence of the problem
Banking sector statistics
Empirical evidence
Farmer Experiences (Video)
Kenya’s approach to credit reporting
system
• Solving information asymmetry through credit
bureaus
• Two-pronged approach:...
Progress
• Association of Kenya Credit
Providers (AKCP) formed
• Mobilising SACCOs, utilities,
consumer credit providers…
...
A 2 hour training is provided
to cover:
CIS awareness
How CRB’s will help in
Access to credit
How to improve their cred...
Entry-level Micro Very small Full SME
SMEBSCosts&Fees
Basic KYC and MCRB SME bureau credit report inquiry dataBasic KYC an...
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Expanding lending to Agriculture through CIS

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Nairobi 16 July, 2014 - Presentation by Jared Getenga
(APRACA) at the Fin4Ag Conference.

Published in: Economy & Finance
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Expanding lending to Agriculture through CIS

  1. 1. Expanding lending to Agriculture through CIS Jared Getenga Fin4ag AFRACA 2014
  2. 2. Synopsis • Problem: Agricultural SMEs unable to access credit • Cause: Higher level of information asymmetries compared to corporates, excessive demand for tangible collateral, low understanding of borrower needs • Consequences: Inadequate external financing to underpin productive activities of agricultural SMEs • Solution: 'know the business and the client‘. CIS to enhance credit providers’ ability to determine repayment willingness in addition to repayment capacity ----CHARACTER
  3. 3. Evidence of the problem Banking sector statistics Empirical evidence
  4. 4. Bank sectoral lending – 2013 &2014
  5. 5. Comparison between Agriculture and Personal financing
  6. 6. Evidence of the problem Banking sector statistics Empirical evidence
  7. 7. Farmer Experiences (Video)
  8. 8. Kenya’s approach to credit reporting system • Solving information asymmetry through credit bureaus • Two-pronged approach: – Supply-driven data pooling – …lender-bureau collaborative on-boarding
  9. 9. Progress • Association of Kenya Credit Providers (AKCP) formed • Mobilising SACCOs, utilities, consumer credit providers… • Positive data from commercial banks and MFBs in the last 5 months
  10. 10. A 2 hour training is provided to cover: CIS awareness How CRB’s will help in Access to credit How to improve their credit ratingsTips on business credit management
  11. 11. Entry-level Micro Very small Full SME SMEBSCosts&Fees Basic KYC and MCRB SME bureau credit report inquiry dataBasic KYC and MCRB SME bureau credit report inquiry data SMEBS Qualitative dataSMEBS Qualitative data SMEBS Quantitative data SMEBS Quantitative data SMEBS Site Verification data + MCRB Alternative data*SMEBS Site Verification data + MCRB Alternative data* DataComposition& SMEBSReportcontent Low High Rich Basic Bronze Silver Gold Platinum SMEBS 00010001000 SME Ltd SMEBS 00010001000 SME Ltd SMEBS 00010001000 SME Ltd SMEBS 00010001000 SME Ltd SMEBS Credit Score 1,000550 SMEBS Tier Level 650 750 Typical SME Size#
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