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How to Apply For Credit Reference Bureau Licence in Kenya

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How to Apply For Credit Reference Bureau Licence in Kenya by Kenyans247(m): Sun Jan 2020 01:15pm
Procedure

A Credit Reference Bureau (CRB) is an entity licensed to collect and collate credit information on individuals and businesses from different sources and provide that information upon request mainly by credit providers in the form of a credit report.
Apply in Person
Book an appropriate name with the Registrar of Companies and write to the Central Bank to seek approval for the name.
The name a search and reservation takes one day to complete and a fee of Ksh.1000 is charged for the process.
After the name has been approved by the Central Bank, you should proceeded to incorporate a limited liability company with the Registrar of Companies.
To apply for a Credit Reference Bureau License, one has to fully complete and submit the prescribed Application for a Licence to Carry Out Bureau Business application form. https://www.centralbank.go.ke/images/docs/forms/ApplicationFormLicenceCarryOutBureauBusiness.pdf
This form can be obtained by downloading it from the Central Bank’s Website https://www.centralbank.go.ke/
After filling the application form you should submit it to the :-
Director,
Bank Supervision Department,
Central Bank of Kenya

You are required to submit the application form with all the required document sand prescribed application fees. These include:-
(i). Certified copies of the applicant’s certificate of incorporation and its Memorandum and Articles of Association.
(ii). Feasibility study by the applicant, showing the nature of the planned business, organizational structure, internal control systems and monitoring procedures of the company.
Duly completed Fit and Proper forms https://www.centralbank.go.ke/images/docs/forms/FitProperForm_Significant_Shareholders.pdf for proposed directors, senior officers and significant shareholders. The forms can be downloaded from the CBK website: [1] https://www.centralbank.go.ke./
(iv). Sworn declarations of proposed directors, officers and significant shareholders in the forms set out in the Second Schedule to the Banking (Credit Reference Bureau) Regulations, 2013;
(v). Management processes including the software required for operation, characteristics of products and services to be provided to subscribers, service policies and procedures manuals, as well as the proposed security and control measures aimed at preventing misuse or improper management of information.
(vi). Overview of operations including the description of systems and the design of the data collection including the unique identification system for individuals and enterprises that is adequate to ease the collection of data and handling of the database.
(vii). A description of the applicant’s proposed premises and their suitability for customer service and the description of the security measures to be adopted.
(viii). The proposed fees and cost structure of products and services.
(ix). Audited financial statements for the last three years where applicable;
(x). A prototype of the final product that demonstrates the principal features and functions of the system.
(xi). A banker’s cheque of Ksh. 10,000 payable to Central Bank of Kenya, being a non-refundable application processing fee.
The Central Bank’s Inspectors will then carry out an in depth review of the contents of each document submitted for regulatory compliance, relevance and scope.
Upon meeting all the above requirements, the Central Bank will grant the applicant a letter of intent (approval in principle).
The approval in principle indicates the Central Bank’s intention to license the applicant upon meeting the pending pre-licensing requirements.
With the approval in principle, the applicant may proceed to obtain premises, Information Technology Systems and recruit staff for the proposed CRB
Once the applicant is ready with the premises and Information Technology systems, they should commission a security audit by an independent registered audit firm, with approval of CBK, and submit the security audit report to CBK.
The security audit report should give an expert opinion on the suitability of the premises, adequacy of the management information systems, and any other relevant aspects.
Once the security audit report is forwarded to the CBK, the applicant should invite CBK to conduct an inspection to determine the adequacy of the applicant’s safety and security system.
If the inspection is satisfactory, the CBK shall notify the applicant to submit to the Central Bank:
i. a bankers cheque for one hundred thousand Kenya shillings (Ksh. 100,000) payable to the Central Bank of Kenya being the annual licence fee, and ii. a statutory declaration in the prescribed form sworn under oath by the Chief Executive Officer of the applicant, confirming that the applicant will adhere to the provisions of the CRB Regulations, 2013 and, in particular, that the applicant will not disclose to any person any information obtained pursuant to the applicant’s obligations except as provided therein.
Upon satisfactory fulfilment of the above requirements by the applicant, the CBK will then issue a licence to the applicant and place a notice in the Kenya Gazette to formally license the credit reference bureau.
The newly licensed credit reference bureau may then open its doors to subscribers.
Within thirty days of being granted the licence, the newly licensed credit reference bureau is required to submit to the Central Bank an irrevocable bank guarantee for one million shillings (Ksh. 1,000,000) in a format acceptable to the Central Bank.
Required Documents

Certified copies of the applicant’s certificate of incorporation and its Memorandum and Articles of Association.
Feasibility study by the applicant, showing the nature of the planned business, organizational structure, internal control systems and monitoring procedures of the company.
Duly completed https://www.centralbank.go.ke/images/docs/forms/FitProperForm_Significant_Shareholders.pdf for proposed directors, senior officers and significant shareholders. The forms can be downloaded from the CBK website: www.centralbank.go.ke.
Sworn declarations of proposed directors, officers and significant shareholders in the forms set out in the Second Schedule to the Banking (Credit Reference Bureau) Regulations, 2013;
Management processes including the software required for operation, characteristics of products and services to be provided to subscribers, service policies and procedures manuals, as well as the proposed security and control measures aimed at preventing misuse or improper management of information.
Overview of operations including the description of systems and the design of the data collection including the unique identification system for individuals and enterprises that is adequate to ease the collection of data and handling of the database.
A description of the applicant’s proposed premises and their suitability for customer service and the description of the security measures to be adopted.
The proposed fees and cost structure of products and services.
Audited financial statements for the last three years where applicable;
A prototype of the final product that demonstrates the principal features and functions of the system.
A banker’s cheque of Ksh. 10,000 payable to Central Bank of Kenya, being a non-refundable application processing fee.

Office Locations & Contacts

Central Bank of Kenya
Haile Selassie Avenue
P.O Box 60000 – 00200,
Nairobi, Kenya
Tel / Fax: +254 20 286 0000
Phone: +254 20 286 1000, +254 20 286 3000, +254 709 081 000, +254 709 083 000
Email: comms@centralbank.go.ke
Website:CBK Website https://www.centralbank.go.ke/contact-us/

Eligibility

Any person is eligible to make an application to run a CRB.
This application allows a person to operate a Credit Reference Bureau (CRB) in Kenya.
In Kenya no person shall, operate a CRB unlessens authorized by the Central Bank of Kenya.

Fees

The name a search and reservation fee of Ksh.1000
Application fee is Ksh. 10,000 for a new licence (fees are in bankers cheque payable to the Central Bank of Kenya);
The licence fee of Ksh. 100,000

Validity

The validity period is one year.
A licence issued under this section shall, unless earlier revoked, expire on the 31st December next following the date of issue:

Documents to Use

Application For a Licence to Carry Out Bureau Business https://www.centralbank.go.ke/images/docs/forms/ApplicationFormLicenceCarryOutBureauBusiness.pdf
Fit and Proper forms https://www.centralbank.go.ke/images/docs/forms/FitProperForm_Significant_Shareholders.pdf
Statutory Declaration Form https://www.centralbank.go.ke/images/docs/forms/StatutoryDeclarationDesignatedCEO.pdf
Data Specification Template https://www.centralbank.go.ke/images/docs/forms/DataSpecificationTemplate.pdf
Directory of Licenced Credit Reference Bureaus https://www.centralbank.go.ke/wp-content/uploads/2016/06/Directory-of-Licenced-CRBs-.pdf

Processing Time

The processing time is 120 days.

Instructions

For purposes of renewal of license, please submit the duly completed form, to the CBK
For purposes of application for a new license, an applicant is required first to seek approval name from the Central Bank of Kenya and thereafter will be advised on the documents to be submitted together with the duly completed form.
Upon satisfying all the requirements and paying the applicable licensing fees the applicant will be issued with a license.
All information provided shall be treated as confidential.

Required Information

Name of applicant
Head/ Main office
Physical and postal address of head office/ proposed new outlet
Date of incorporation
Form of incorporation
Description of the applicants business or functions
Certificate of incorporation Number
Details of subsidiaries and affiliates (Name of Outlet, County, City/Town, Street, Building, Date opened)
Particulars of shareholders (Name, Nationality, Date of acquisition, Amount of shareholding, % of shareholding)
Particulars of directors (Name, Nationality, Date of appointment, Level of education)
Particulars of the officers in the order of seniority (Name, Designation, Nationality, Date of appointment)
Ownership profiles
Shareholding in any other financial institution
Name of applicants external auditors
Declaration

Need for the Document

This license allows the holders to operate a Credit Reference Bureau in Kenya.
A person who operates a Credit Reference Bureau without a valid license commits an offence and shall, on conviction be liable to a fine not exceeding five hundred thousand shillings, or to imprisonment for term not exceeding three years, or to both.

Information which might help

Section 31(4) of the Banking Act, mandates the Central Bank to licence and supervise credit reference bureaus (CRB). The Credit Reference Bureau Regulations, 2013, govern the licensing, operation and supervision of CRBs by the Central Bank of Kenya

Benefits to the customer
A credit report makes it easier for good customers to distinguish themselves from persistent defaulters, thereby attracting favourable loan terms.
Financial institutions have online access to credit reports generated by the CRBs, resulting in reduced paperwork for the customer and faster processing of loans.
By making credit histories more portable, customers are able to easily switch between financial institutions and thereby take advantage of competition to secure better credit terms.

Benefits to Credit Providers/Lenders
CIS strengthens the credit risk management processes for financial institutions.
It facilitates faster and more efficient reviews of customers’ credit or loan applications

Benefits to the economy
CIS creates an opportunity for a wider cross section of the population to access credit, particularly those with no access to tangible collateral.
It is expected to reduce lending transaction costs while widely availing credit through reduced cost of credit and enhanced competition

External Links

The Central Bank of Kenya Act https://centralbank.go.ke/images/docs/The_Central_Bank_of_Kenya_Act_1st_January_2014.pdf
Data Validation Rules With Enforcement Codes https://www.centralbank.go.ke/images/docs/forms/DataValidationRuleswithEnforcementCodes.pdf

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