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337 digital mobile lenders barred from CRB listing

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At least 337 digital mobile lenders will not be able to list borrowers with Credit Reference Bureaus (CRBs), after the Central Bank of Kenya (CBK) blacklisted them.

The lenders were blacklisted after a public outcry, whereby they were accused of misusing credit information sharing mechanism (CIS).

“The withdrawal is in response to numerous public complaints over misuse of the CIS by unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints,” said CBK.

In April, CBK withdrew the approvals granted to unregulated digital (mobile-based) and credit-only lenders as third party credit information providers to CRBs.

Prior to the announcement that was issued on April 14, few mobile apps had already suspended their operations without informing their customers, by denying them loans. Others reduced the loan limits for their customers, such as Zenka.

 
 

Among the lenders suspended from submitting borrowers information to CRBs include Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit, Okolea, LPesa, Kopacent, Four Kings Investment T/A Sotiwa, Mobile Financial Solutions (MFS), Kuwazo Capital, and Finance Plan Ltd. Other include Branch, Vaell, Roamtech solutions, Aspira and MicroMobile.

The number of firms allowed to blacklist defaulters with the bureaus has dropped to 2,254 in September from 2,332 in May last year.

Currently, lenders are not allowed to list with the CRBs borrowers who default less than Ksh1,000.