Over 300 Digital Lenders Barred From Forwarding Defaulters to CRB
Kevin Namunwa  |  Oct 12, 2020

Over 300 digital mobile lenders and micro financiers have been barred from forwarding the names of loan defaulters to credit reference bureaus (CRB).

According to CRB, the number of firms allowed to blacklist defaulters with the bureaus has dropped to 2,254 in September from 2,332 recorded in May last year.

This is after there was a public outcry over widespread misuse of the credit information sharing (CIS) mechanism forcing CBK to delink unregulated digital mobile lenders from CRBs.

“The withdrawal is in response to numerous public complaints over misuse of the CIS (credit information sharing) by unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints,” the CBK said in an earlier statement.

With the new digital lending rules, only defaults above Ksh 1,000 will be shared with CRBs. Consequently, borrowers who had been blacklisted for lower amounts are now required to be cleared unconditionally.

The Kenyan economy is at its worst and having more people listed on CRBs further causes the economy to deteriorate. The scene in the economy of Kenya is now majorly characterised by job cuts and near stagnant wages which have left thousands of people in a debt trap.

Data from the CRBs show that the accounts negatively listed had jumped from 2.7 million last year, a significant number of them linked to mobile digital borrowers of less than Sh1,000.

Most of the mobile loan takers are oblivious to the conditions that include lifetime of SMS notifications, full surrenders of their personal data to third parties and waiver of their right to dignity.

In recent months, for instance, consumers of mobile app Okash who delayed or defaulted on their loan repayments have had the unpleasant experience of having the service provider reach out to people in their contacts list in a bid to recover the funds.