Several mobile lenders now blocked from listing borrowers on CRB

The Central Bank of Kenya (CBK) has barred unregulated mobile lenders from listing Kenyans on Credit Reference Bureaus (CRBs).

This according to the reserve bank is in response to the misuse of the credit information sharing (CIS) system by the credit-only lenders, a matter which has lead to numerous complaints by Kenyans.

“With immediate effect, CBK has withdrawn the approvals granted to unregulated digital (mobile-based) and credit-only lenders as third party credit information providers to CRBs.

“The withdrawal is in response to numerous public complaints over misuse of the CIS by the unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints,” the CBK noted in a statement.

“Thus, unregulated digital and credit only lenders will no longer submit credit information on their borrowers to CRBs.”

The barring of unregulated mobile lenders from listing borrowers makes up additional measures on CIS whose publication has been done alongside the 2020, Credit Reference Bureau (CRB) regulations.

Unregulated mobile lenders have been on the end of the wrath of many Kenyans over a number of issues including wrongful listings and the disclosure of critical information on borrowers to contact lists.

The barring of the mobile lenders will come as a relief to many and is part of measures announced by President Kenyatta on cushioning Kenyans from the Covid-19 crisis extremes.

“Consequently, loans that fall in arrears from April 1 to September 30, 2020, will not lead to the ‘blacklisting’ of the borrower on the CRBs.

“This is one of the emergency measures that were announced on March 25, 2020, in light of the exceptional circumstances from the coronavirus pandemic and aiming to shield borrowers from the adverse impact,” added the CBK.

The CBK has additionally published new regulations which on CRB regulations, replacing previous rules set in 2013 following a consultative process with players which started in 2018.

Among the key changes include the placing of a minimum threshold of Ksh.1000 for negative credit information that is submitted to CRBs by lenders.

This will mean, no borrower will be blacklisted for amounts less than Ksh.1000 while Kenyans already listed for amounts less than Ksh.1000 will be delisted.

First-time CRBs clearance services will now be issued at no cost while SACCO societies are now included as authorized subscribers of credit data to CRBs.

Unregulated mobile lenders remain the subject of further scrutiny by the CBK which is set to institute new regulations alongside the National Treasury to respond to further complaints from the public including exorbitant interest rate charges on issued loans.