In order to help rate the ability of companies to repay loans they get from commercial banks, banks will have to submit the names of the directors and key shareholders to the Credit and Reference Bureaus (CRBs).
Lenders are supposed to fill a form that will help establish the diligence of corporate borrowers by knowing the identities and details of the key shareholders, directors, top managers and the individuals who own 10 percent of the total shares.
“In the case of non-natural persons like companies, the information of the directors is shared to the bureau so that the lenders can know the level of indirect exposure they have,” said Jared Getenga, chief executive of the industry lobby Credit Information Sharing Association of Kenya.
Listing of the key shareholders of borrowing companies will help provide information required during risk assessments as opined by the Central Bank of Kenya (CBK).
This call to have lenders list the companies’ key shareholders comes after several companies had defaulted loans and accounting for the funds could not be possible as the key names were not revealed.
Some of the companies who had defaulted on their loans, and owe lenders billions of shillings are Consolidated Bank, Athi River Mining and Nakumatt.
Other companies that had been in trouble and are still negotiating for funds are Uchumi supermarket and Real People.
The listing will have details of the shareholders and their creditors. The details will include name, national identification number, address, tax identification number, and any other employer information which the CBK views as necessary for risk assessment.
“The law is clear on what should be shared with the CRBs; that is a customer’s identification details, their credit status, their securities and details of payment of credit facilities. Employment information and income are shared to assist the lender to determine the ability of the borrower to repay the facility,” says Jared Getenga.
CBK will require banks, microfinance and credit bureaus to gather data to be submitted by the at midnight after it shall have been collected during the day.