The Central Bank of Kenya (CBK) has barred over 337 unregulated digital and credit-only lenders from listing loan defaulters at the three credit reference bureaus (CRBs) in the country.
The blacklisting was due to public outcry over the misuse of Credit information sharing (CIS) by the mobile lenders, the CBK said.
“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 earlier.
The three CRBs in the country – Metropol, TransUnion and Creditinfo International – said the number of firms allowed to blacklist defaulters has dropped from 2,332 in May 2019 to 2,254 in September.
It comes at a time when most of the defaulters listed at CRBs are linked to digital lenders like Tala and Branch.
Part of the new CBK rules as it pertains forwarding defaulters to CRBs prevent lenders from listing defaulters owing amounts less than KSh 1,000. Also, the CBK previously ordered CRBs to delist defaulters who have defaulted amounts less than KShs 1000 with no strings attached.
This year, over 3.2 million have been listed fro defaulting loans at CRBs up from 2.7 million last year. And most of these defaulters are linked to mobile loans with borrowers defaulting on amounts less than Kshs. 1000.
Recently, the CBK lifted its six months long CRB listing freeze order allowing different lenders to start listing loan defaulters.