The Central Bank of Kenya (CBK) has barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus (CRBs) and stopped the blacklisting of borrowers owing less than Sh1,000.
CBK said delinking unregulated digital mobile lenders from CRBs was as a result of the public outcry over widespread misuse of the credit information sharing (CIS) mechanism.
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“With immediate effect, CBK has withdrawn the approvals granted to unregulated digital (mobile-based) and credit-only lenders as third party credit information providers to CRBs.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.