A new system which will grade borrowers’ ability to repay bank loans will be launched this year by the Credit Reference Bureau (CRB), Aimable Nkuranga, the firm’s country manager has disclosed.

Currently, the bureau collects information on borrowers from credit guarantors which they compile into reports that are later used by the lenders to assess creditworthiness of individuals or companies.

With the new system, Nkuranga said individuals and companies will be given credit scores after matching their credit information with demographic factors like age and marital and employment status.

"We are developing a platform that will be able to combine all those factors automatically,” he said.

He added that individuals and companies will be given a credit score of between 200 and 600 points.

"If one has a credit score of 600, then that individual or entity’s level of creditworthiness is high. Those with scores between 200 and 300 will be seen as ‘risk’ borrowers and stand little chance of getting loans,” he explained.

CRB presently handles over two million credit accounts. Commercial banks, microfinance institutions, Saccos, insurance companies, the Energy, Water and Sanitation Authority and telecom companies are among its current clients.

"The move is expected to facilitate credit issuance to individuals and companies, which will reduce the rate of non-performing loans in the country,” Nkuranga said.