Reports suggest that more than 337 unregulated digital mobile lenders and micro financiers have been barred from forwarding the names of loan defaulters to credit reference bureaus (CRB).

Digital Mobile Lenders Ejected from CRB listing

Apparently, the drop is linked to a directive from the Central Bank of Kenya (CBK). Its delinking unregulated digital mobile lenders from CRBs. This is following a public outcry over widespread misuse of the credit information sharing (CIS) mechanism.

For example, Branch was locked out at a time when the bulk of accounts negatively listed with the CRBs – Metropol, TransUnion and Creditinfo International – are linking to mobile digital borrowers.

Start off your week with tech news recap and trending conversations in your inbox

Enter valid email-id

Subscribe

I prefer it on Telegram

“The withdrawal is in response to public complaints about misuse of the CIS by unregulated digital and credit-only lenders. Particularly their poor responsiveness to customer complaints.” the CBK says in an earlier statement.

The Rules

Currently, only defaults above KES 1,000 will be shared with CRBs. Note that borrowers who had been blacklisted for lower amounts are now required to be cleared unconditionally.

The regulator also gave the banks the green light to blacklist borrowers who have defaulted during the pandemic period.

According to the CBK, there are currently more than 3.2 million Kenyans that are loan defaulters. This is a jump from last year’s 2.7 million, most of whom are still in the mobile digital lender’s book.

Here are some of the noteworthy amendments to regulations of the (CRB). This is a move in a bid to bridge the information gap about borrower’s creditworthiness.

1. Mobile loan apps will no longer list people on CRBs. This is due to numerous complaints about misuse of the CIS by loan apps.
2. CBK SETS Sh1,000 as the minimum threshold for negative credit information submitted by CRBs.
3. Subsequently, no financial institution is going to list anyone defaulting as long as the loan is below KES 1000.
4. First time CRB clearance certificates will be provided by CRBs at no charge.
5. Loans that fall in arrears from April 1 to September 30, 2020, will not lead to blacklisting of the borrower on CRB. Their aim is to shield borrowers from the adverse impact of the novel Coronavirus.

How To Check CRB status with Metropol

• Dial *433# on your Safaricom number
• Input your National ID Number
• In the next section, enter zero (0) to continue
• Confirm your details to complete the registration
• Pay KES.100 as registration fee through the Paybill number 220388. Use your National ID number as the account number
• You’ll receive three SMS from Metropol. One is a confirmation for the payment, the second will contain your PIN and the third will contain a link and reference number which you will use to download your report
• Access the Metropol website through the provided link and input your phone number and the reference number to download your credit report

Check out how to check with TransUnion and Credit Info here