Why CRBs are too important to fail

If you doubt it, follow the numbers published by credit reference bureaus (CRBs), the FinAccess household surveys and Safaricom’s own disclosures on Fuliza. Examine the market analytics produced by the CRBs themselves. The picture is unmistakable: Kenya is increasingly hooked on small, high-frequency digital loans.

With Fuliza overdrafts, Hustler Fund microloans, M-Shwari, KCB MPesa and a mushrooming marketplace of mobile lending apps, millions of Kenyans now interact with debt every single day.

This is not credit in the traditional sense—no mortgages, no business loans, no structured instalment facilities. It is “nano-credit”: instant, tiny-ticket borrowing to get through the day, bridge a bill or keep a household afloat. What began as financial inclusion has quietly morphed into widespread dependence on short-term digital overdrafts that roll over endlessly.

To be fair, these digital credit products play a legitimate role. They help smooth income volatility in an economy dominated by self-employment and informal wages. They provide quick liquidity for emergencies.

Read: CRBs must sharpen capacity to stay relevant

Yet they also come with corrosive risks: fee-driven indebtedness, habitual refinancing and fragile household balance sheets that crumble under the slightest economic shock. A sickness, school bill or delay in payment can tip families into spirals of recurring microloans.

Amid this creeping addiction, one critical reality is dangerously overlooked: Kenya’s financial system now depends on strong, stable, well-capitalised CRBs. A CRB is not an ordinary company. It is the quiet backbone of the country’s credit system—an institution that collects, validates and preserves credit histories for individuals and businesses. When a CRB falters, the entire ecosystem wobbles.

A CRB failure can distort credit scores, corrupt repayment records, lower credit access and trigger systemic lending errors.

Inaccurate or delayed data can lead to overlending, rising defaults or sudden tightening of credit—each with profound economic consequences. Credit markets cannot function properly without reliable, uninterrupted credit referencing. This is why recent developments involving Metropol—the largest CRB in Kenya by market share—must be taken seriously.

In July 2022, the Central Bank of Kenya’s Bank (CBK) Supervision Department conducted a targeted inspection of Metropol and found the institution facing significant financial challenges. I have also reviewed a forensic audit ordered by its board audit and risk committee in July 2024, containing sensational allegations of improprieties and weaknesses in financial management.

On May 20, Metropol applied to the CBK for approval to sell its assets and business to a private equity firm, Geni (K) Ltd.

That transaction has since collapsed. The CBK withheld approval, but the deeper reason was irreconcilable shareholder hostilities.

I came across a letter by the Bank of Uganda declining to approve changes to the ownership structure of Metropol’s Ugandan subsidiary, citing internal shareholder disputes that remain unresolved. A shareholder told me they remain open to engaging alternative strategic partners.

But here is the uncomfortable truth: a CRB is not just another private company to be bought, sold or allowed to drift into distress. It is a systemically important financial-infrastructure institution. A destabilised CRB can destabilise the nation’s entire microcredit architecture—an architecture that millions of Kenyans now depend on for daily survival.

If Metropol were to fail, the consequences would be far-reaching. Fuliza, Hustler Fund, M-Shwari, digital lenders, microfinance institutions, saccos and even regulators depend on its data pipelines. A disruption would create operational chaos, credit uncertainty and widespread risk mispricing.

If a new strategic investor is to be brought in, the criteria must be stringent. It cannot merely be about injecting capital. The partner must demonstrate capacity in modern data analytics, real-time mobile loan reporting, cyber-resilience, interoperable systems, customer data protection and the ability to support Kenya’s rapidly digitising credit ecosystem. These standards must be non-negotiable.

Policymakers must abandon the notion that CRBs are just ordinary private firms. They must stabilise the bureau, strengthen oversight and ensure continuity of service.

They must address urgent policy questions: What borrower protections exist when a CRB is in distress? How rigorous is the CBK’s supervision of CRBs? Has the regulator adequately mapped the systemic risks posed by weak or insolvent bureaus? Do contingency plans—such as temporary custodianship of credit data—exist to ensure uninterrupted service?

Because here is the larger truth: the institutions meant to safeguard Kenya’s credit ecosystem can, if neglected, magnify the vulnerabilities of a country, where the majority are increasingly dependent on microcredit to survive.

The writer is the former managing editor of The EastAfrican.
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