Author : Muzammal Rahim

Expected Credit Loss (ECL) represents a fundamental shift in how financial institutions recognize and manage credit risk. Unlike traditional accounting approaches that recognized losses only after they occurred, ECL requires institutions to anticipate and provision for potential credit losses over the life of a financial asset. This forward-looking framework enhances transparency, strengthens financial resilience, and […]

Under IFRS 9, Expected Credit Loss (ECL) modeling is no longer just a compliance checkbox it is a critical tool for capital preservation. For Kenyan lenders, the challenge lies in balancing the diversity of the local market (from mobile micro-loans to large corporate syndications) with the technical requirements of the standard. A “one-size-fits-all” approach to […]

The financial landscape in Kenya has been rapidly transformed by the rise of mobile lending and fintech solutions. These innovative platforms have democratized access to credit, reaching millions of Kenyans previously underserved by traditional banks. However, this growth brings with it increased scrutiny and the need for robust financial reporting, particularly concerning IFRS 9 (International […]

Implementing IFRS 9 (International Financial Reporting Standard 9) in Kenya has been a transformative journey for the financial sector, shifting the focus from historical “incurred” losses to a forward-looking Expected Credit Loss (ECL) framework. While the standard is designed to be quantitative and data-driven, the reality of the Kenyan economic landscape often requires a delicate […]

The implementation of IFRS 9, Financial Instruments, has brought significant changes to how financial assets and liabilities are accounted for, particularly in the areas of classification and measurement, impairment, and hedge accounting. For Kenyan entities, navigating these new standards has presented a steep learning curve, and auditors are meticulously examining compliance. Here, we delve into […]

The adoption of International Financial Reporting Standard 9 (IFRS 9), effective globally from January 1, 2018, has fundamentally transformed how Kenyan financial institutions, including commercial banks, Microfinance Banks, and SACCOs, manage and account for credit risk, particularly concerning corporate loans and default risk. The core change is the shift from a backward-looking Incurred Credit Loss […]

The adoption of IFRS 17 (Insurance Contracts) and its interaction with IFRS 9 (Financial Instruments) marks one of the most significant changes to financial reporting for the insurance industry in decades, and Kenyan insurers are navigating this complex regulatory landscape. What is IFRS 17 and IFRS 9? The Critical Interaction: IFRS 9 and IFRS 17 […]

The financial landscape in Kenya, much like the rest of the world, has undergone significant transformation with the introduction of IFRS 9 Financial Instruments. This international accounting standard has fundamentally changed how financial institutions recognize, measure, and disclose financial assets and liabilities, placing a particular emphasis on forward-looking expected credit loss (ECL) provisioning. For Kenyan […]

The global financial crisis of 2008 exposed a critical flaw in global accounting: the “too little, too late” problem of recognizing credit losses. When the crisis hit, banks were slow to provision for expected loan defaults because the prevailing standard, IAS 39 (Financial Instruments: Recognition and Measurement), only allowed them to recognize a loss after […]

The adoption of IFRS 9 Financial Instruments in Kenya, mandated by the Central Bank of Kenya (CBK), introduced a fundamental shift in how financial institutions (FIs)—especially commercial banks and smaller entities like SACCOs—calculate loan loss provisions. The move from the backward-looking Incurred Credit Loss (ICL) model (under IAS 39) to a forward-looking Expected Credit Loss […]