The ongoing COVID-19 pandemic has put Kenya’s financial institutions, including commercial banks, at the heart of a fast-changing crisis. This trend has been magnified by the increasing non-performing loans and the rapidly growing consumer appetite for borrowing at a time when income is under pressure.

TransUnion, a credit status review company, recently announced the launch of TrendedView Report. The new consumer report helps lenders understand consumers’ credit behaviour and repayment patterns before and after the crisis hit to identify credit risk and lending opportunities.

Lenders remain under pressure to restructure loans and offer tax holidays to be rendered to consumers. The impact of the recent extension of the consumer loan repayment period is estimated by TransUnion to apply to around Ksh. 1.7 trillion, or 57% of the banking sector’s Ksh. 2.9 trillion consumer lending book.

Additionally, TransUnion’s credit data shows that non-performing loan rates in Kenya have increased to 14.6% in March 2021, from 12.5% in March 2020, as more borrowers are defaulting. Fraud remains an ongoing and increasing concern, with TransUnion data putting annual losses from identity theft and loan stacking at approximately Ksh. 13.3 billion.

“A credit score alone doesn’t give banks and financial institutions full context of a consumer’s financial position. It’s important to understand the customer journey in the context of economic and business trends. Insights on consumers’ credit scores and loan balances before and after the crisis, how their credit scores are trending, what loan products they have and what the credit limits are, can lead to better risk management and more informed lending decisions,” said Samuel Tayengwa, director of product at TransUnion Kenya.

The TrendedView Report provides a picture of a consumer’s ability to manage financial commitments and determines appropriate risk levels. This allows lenders to know their share of wallet, improve risk decisions, set competitive credit limits and grow their customer bases.

“Access to credit is fundamental to a strong and growing economy. This capability will help consumers build financial security by getting access to responsible credit, while giving credit providers deeper insights into the risk behaviour of consumers to better serve them and advance them credit that can lead to a higher quality of life,” concluded Tayengwa.