The country’s banking regulator, the Central Bank of Kenya (CBK) is now reported to have locked out up to 624 loan lenders from sharing information on loan payments and defaults last year. This was in the wake of a rise in customer complaints who were getting listed for defaults that were so low.

As reported by Business Daily, new data now reveals that Kenya had 1,994 third-party data providers allowed to share borrowers’ loan defaults and payments with Credit Reference Bureaus (CRBs). This accounted for a 23.8% drop from 2,618 firms licensed in the previous year.

In its report, the CBK associated this decline with an outcry from Kenyans over widespread misuse of the credit information sharing (CIS) mechanism.

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

Enter valid email-id

Subscribe

I prefer it on Telegram

Reports had been coming out about millions of people being listed on CRBs on a monthly basis, a scenario that had started raising concerns. Luckily, the CBK ran to the rescue on April 1 2020 to freeze CRB listing on loan defaults. This was seen as not only an action against the loan firms but a relief to Kenyans who were suffering financially amid the COVID-19 pandemic. The ban lasted six months up to September 30th.

“The decline in numbers follows CBK withdrawal on April 14, 2020, of 491 approvals granted to unregulated digital (mobile-based) and credit-only lenders as third-party credit information providers to CRBs,” CBK stated in its Supervision Annual Report 2020.

After this, it was clear that most if not all loan lenders would start to tighten the access to their services and not just have everyone borrowing money. This was even advocated for by the CBK earlier this year recommending for lenders to focus on select clients.

It is expected that new policies will be brought up in a bid to regulate the interest rates that these loan lenders offer. It’s only a matter of when.