Ruto is right, data from CRB should help reduce cost of borrowing
President William Ruto. The president is correct to insist that lenders must use the score, and not just a negative listing because the score contains a more holistic picture.
Best practice requires lenders to use risk-based pricing. At the point of lending, the lender should estimate the probability that you will default on that loan.
Moreover, she must estimate loss given default. With these two pieces of information, she can accurately predict the expected loss of that loan.
The president is correct to insist that lenders must use the score, and not just a negative listing because the score contains a more holistic picture.
Speaking after meeting Safaricom and her partner banks mid-week, President William Ruto insisted that credit scoring must be used appropriately and not deny credit. He is absolutely right. Here is why.
Best practice requires lenders to use risk-based pricing. At the point of lending, the lender should estimate the probability that you will default on that loan.
