An Application of the Blockchain Technology in Credit Information Sharing in Kenya

Abstract

Credit information sharing is a critical credit infrastructure that guarantees stability of the credit market by reducing the gap of information asymmetry between the lender and the customer. The credit information sharing mechanism involves an exchange of credit information amongst lenders through the credit reference bureaus (CRBs). For an effective credit information sharing mechanism, maintaining the integrity of the system is critical while considering privacy and security of data. As the CIS mechanism is continuously gaining in popularity in usage within the Kenyan credit market, there have been instances of malicious, unauthorised deletion and unlawful access to credit information that compromises the integrity of the system. To gain a comprehensive picture of the sentiments of the industry, a mixed-methods study was conducted with 93 respondents. The analysis of the results suggested there were instances of manipulation of data and unauthorised access and that use of blockchain technology would ensure security, the privacy of data and traceability on who accessed or made data changes. Through the findings of the study considering the importance of the mechanism to policymakers should consider adoption of the prototype for use in the credit market is recommended. Keywords: {Blockchain technology, credit information sharing, credit market, integrity}