Kenyan bankers partner with UK Institute to bolster credit risk management

Dr Samuel Tiriongo, Director, Research & Policy at the Kenya Bankers Association Peter Gitau, Training Co-Ordinator, Kenya Bankers Association Institute; Kimacia Gitau, CISI Regional Representative; Bernice Onyango, Manager, Kenya Bankers Association Institute, during the signing ceremony. [Courtesy]

The Kenya Bankers Association (KBA) has joined forces with the Chartered Institute for Securities & Investment (CISI) to elevate standards in credit risk management within Kenya's banking sector.

The strategic partnership, formalised through a Memorandum of Understanding (MOU), will see the KBA endorse the CISI's Fundamentals of Credit Risk Management (FCRM) exam to its 46 member banks.

The FCRM certification is designed to provide banking professionals with crucial skills and knowledge for effective credit risk assessment and mitigation.

By promoting a deeper understanding of risk evaluation, best practices, and proactive strategies, the initiative aims to strengthen the Kenyan banking sector's resilience in managing lending risks.

The collaboration comes as Kenya's financial industry grapples with a persistent challenge of non-performing loans (NPLs), which have the potential to undermine financial stability and hinder economic growth.

By championing the FCRM exam, both the CISI and the KBA intend to cultivate a more proficient workforce capable of making informed credit risk assessments, ultimately contributing to a reduction in NPL levels across the market.

The move aligns with broader industry objectives of fostering responsible lending practices and ensuring a robust financial ecosystem.

Raimond Molenje, CEO of the Kenya Bankers Association, hailed the partnership, stating, "Strengthening credit risk management capabilities is essential to mitigating financial sector risks and fostering sustainable banking practices. We encourage our member banks to adopt the FCRM certification as a standard for credit risk professionals."

Kevin Moore, Executive Director, Membership and Business Development at CISI, echoed this sentiment, emphasising the institute's commitment to supporting Kenya's banking sector with globally recognised qualifications.

"The FCRM exam will equip professionals with the knowledge and tools necessary to enhance credit assessment processes, ultimately leading to more informed lending decisions and a reduction in non-performing loans," Moore said.

The FCRM exam targets a wide range of banking professionals involved in credit evaluation and decision-making, including credit analysts, risk managers, and loan officers.

With the KBA's endorsement, banks are expected to increasingly integrate the certification into their staff training programs, fostering a higher level of competence in credit risk management across the industry.

The KBA, an umbrella body representing all licensed commercial banks in Kenya, seeks to standardise management practices and improve harmonisation within the sector.

The CISI, with roots in the London Stock Exchange and a global presence including an office in Nairobi, collaborates with regulators and financial institutions worldwide to strengthen market integrity and enhance professional standards.

This partnership signifies a concerted effort to bolster the Kenyan banking sector's capacity to navigate credit risks effectively in the face of economic headwinds.