More than 337 unregulated digital mobile lenders and micro financiers have been barred from forwarding the names of loan defaulters to credit reference bureaus (CRBs) by the Central Bank of Kenya (CBK).
The directive by the CBK delinking unregulated digital mobile lenders from CRBs follows a widespread public outcry over the misuse of the credit information sharing (CIS) mechanism.
The CRBs say 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.
“The withdrawal is in response to numerous public complaints about misuse of the CIS (credit information sharing) by unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints,” the CBK said in an earlier statement.
Firms such as Tala and Branch have been locked out.
This is after a report showed that more than 3.2 million Kenyans had been negatively listed as loan defaulters in an economy where job cuts and near stagnant wages have left thousands of people in a debt trap.
The new order comes just weeks after the CBK announced the suspension of CRB listing for loans that were defaulted after April 1, and the relief was to last for six months to September 30.