NAIROBI,Kenya Apr 16 – Unregulated digital and credit only lenders are no longer allowed to submit credit information on their borrowers to credit reference bureaus (CRBs) according to the latest guidelines released by Central Bank of Kenya (CBK).
This means that only banks, deposit-taking SACCOs will be allowed to blacklist loan defaulters with CRBs. Firms such as Tala, Branch, Okash among others can no longer share their borrowers’ credit information with the bureaus.
The regulator said that the withdrawal was made in response to numerous complaints over misuse of the Customer Information Sharing (CIS) by the unregulated digital and credit-only lenders,
“With immediate effect, CBK has withdrawn issuance of approvals to mobile-based, unregulated digital and credit-only lenders as third party credit information providers to CRBs.
“Thus, unregulated digital and credit-only lenders will no longer submit credit information on their borrowers to CRBs,” a statement issued by CBK noted.
The lenders has also been faulted for their poor responsiveness to customer complaints, an issue which has previously been raised by CBK boss, Patrick Njoroge as he called for tough policing of digital lenders as per the National Payment Systems Act.
In the new measures set to cushion borrowers from adverse effects of COVID 19, borrowers of less than Sh1,000 will be exempted from being listed on the bureau.
The regulator has further ordering the bureau to de-list previous borrowers with meeting the same criteria.
A minimum threshold of Ksh.1,000 has now been set for negative credit information that is submitted to CRBs by lenders. Borrower’s information regarding non-performing loans of less than Ksh.1,000 will therefore not be submitted to CRBs, and borrowers that were previously “blacklisted” only for amounts less than Ksh.1,000 will be “delisted.”
Sacco Societies, regulated by Sacco Societies Regulatory Authority (SASRA)have been included as authorized subscribers of credit data to CRBs.