Aug. 27 (Bloomberg) -- Kenya’s central bank approved “in principle” the country’s first credit-rating agency, giving lenders better access to clients’ credit histories

The Kenya-based Credit Reference Bureau Africa may get its full permit from the central bank and start operating in the next few months once it passes a security audit and on-site inspection, Governor Njuguna Ndung’u told reporters today in the capital, Nairobi.

Two other companies, locally run Metropol and South African-based Compuscan, have also applied for licenses, he said.

The permit was granted under the terms of the banking credit reference bureau regulations that came into effect in February and enable credit agencies to collect individuals’ payment information from banks, water, power and phone utilities, tax records, and the courts. They may then pass on the details at the request of banks. The regulations also set out the procedure for individuals to settle legal disputes over their credit score.

This may help curb the incidences of repeat loan defaults and lower borrowing costs, resulting in higher economic growth for the country, said Ndung’u.

“The risk premium associated with information asymmetry and search costs will decline,” he said. “Savings arising from the increased credit information shall translate to lower cost of credit.”

‘Easier Borrowing’

The move may also make borrowing for informal and small businesses easier because they will build a credit profile, rather than having to underwrite their loans with land or other physical collateral, Ndung’u said.

“Borrowers without access to such collateral have been constrained in accessing credit,” he said.

Ndung’u also said that the global economic crisis and the country’s drought may not crimp Kenya’s economic growth until 2010. A lack of rainfall for several seasons has led to scheduled power cuts, water-rationing and crop failure.

The government is not likely to consider the possibility of revising its 2009 economic growth projection of 3 percent until year-end, said Ndung’u.

“Towards the end of the year, once the rains and food situation is resolved,” Kenya’s government “might revise” its growth estimates, he said.

To contact the reporter on this story: Sarah McGregor in Johannesburg at smcgregor5@bloomberg.net

Last Updated: August 27, 2009 06:48 EDT