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

1. Expanding lending to Agriculture
through CIS
Jared Getenga
Fin4ag
AFRACA 2014

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. Evidence of the problem
Banking sector statistics
Empirical evidence

4. Bank sectoral lending – 2013 &2014

5. Comparison between Agriculture and Personal
financing

6. Evidence of the problem
Banking sector statistics
Empirical evidence

7. Farmer Experiences (Video)

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. 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. 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. 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#