National Assembly Finance and National Planning Committee Chairperson Kuria Kimani has challenged banks to move away from collateral-based lending, warning that the practice is denying millions of young people and entrepreneurs access to credit.
Speaking during the African Banking School (EABS) Conference in Diani, Kwale, Kuria argued that banks must embrace data analytics and modern risk assessment tools to remain relevant in a rapidly evolving financial sector.
“Your banks, your institutions are still using collateral as the main basis of lending. If you continue like this, you will have no one to lend to. These young people do not have the collateral you seek. You must up your game in data analytics and risk profiling,” Kuria stated.
His remarks came as banking leaders from across East Africa gathered to discuss how digital transformation is reshaping lending, risk management and financial inclusion.
Opening the conference, Central Bank of Kenya Governor Dr. Kamau Thugge underscored the need for banks to adopt artificial intelligence responsibly, maintaining that technology should support and not replace human judgment.
“AI models should be transparent, explainable, and subject to effective human oversight, and ultimately the responsibility for credit decisions must continue to rest with banks and not algorithms,” Thugge observed.
The conference heard that lenders are increasingly turning to alternative data, including mobile money transactions and other digital financial records, to assess borrowers who lack traditional credit histories or collateral.
Kenya Bankers Association Chairman Paul Russo noted that innovation presents an opportunity to expand access to financial services while improving risk management.
“Our ambition should be to explore how innovation, technology, artificial intelligence, alternative data and collaboration can help us better understand risk, reduce it and ultimately make more individuals, businesses and communities bankable,” Russo remarked.
Kenya Bankers Association Chief Executive Officer Raimond Molenje called for greater collaboration among East African countries, calling on the region to work together so as to strengthen its financial sector .
“We have been playing second to the north and south of Africa as far as banking and the financial landscape is concerned. But we are here to change that landscape. We have to collaborate, we have to work together and forget our boundaries as East Africa and be able to look at ourselves as one region to be able to win,” Molenje noted.
The conference concluded with renewed calls for banks to embrace responsible innovation, strengthen regional cooperation and use technology to expand access to credit while safeguarding financial stability.
