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by Sydney
Political Cartoonist and Commentator


Sydney

Oct 22, 2020

337 Digital mobile Loan lenders removed from CRB listing


The Kenyanpost news

Close to 337 unregulated digital mobile lenders and micro financiers have been barred by the CBK from forwarding the names of loan defaulters to credit reference bureaus (CRBs).

The CRBs say the number of firms allowed to blacklist defaulters with the bureaus has dropped to 2,254 in September from 2,332 in Mid last year.

The decline is attributed to  the directive by the Central Bank of Kenya removing unregulated digital mobile lenders from CRBs following public outcry over widespread misuse of the credit information sharing (CIS) mechanism.

Firms such as Tala and Branch were locked out at a time when the bulk of accounts negatively listed with the CRBs — Metropol, TransUnion and Creditinfo International — are linked to mobile digital borrowers.

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This withdrawal is due to numerous complaints over misuse of the CIS (credit information sharing) by unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints.

Under the new rules, only defaults above Sh1,000 will be shared with CRBs. Borrowers who had been blacklisted for lower amounts are now required to be cleared unconditionally.

More than 3.2 million Kenyans had been negatively listed as loan defaulters in an economy where job cuts and near stagnant wages 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.

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