The Central Bank of Kenya (CBK) has passed a new circular that will rescue hundreds of Kenyans from being listed with the Credit Reference Bureaus (CRBs).
According to a report by The Standard, up to 2.7 million Kenyans may be released from the clutches of CRBs after CBK ordered banks to review their listing rules.
The new circular stated that an individual will be considered for CRBs listing if they fail to pay either a bank or mobile money app loan for six months.
The circular, however, does not apply to mobile lenders who work outside the scope of the banking regulator and online usury that involves an estimated 500 players.
CBK noted that a technical team that researched into the matter found that one of the biggest problems of CRBs was that normal loans were treated differently from mobile ones.
This, according to the regulator, has led to mass listings of individuals who failed to repay their loans after 30 days.
“Among the challenges identified by the technical working group were the difficulties in applying the current data specification template to no traditional forms of credit such as digital loans,” stated CBK Director of Banking Supervision Gerald Nyaoma in the circular.
CBK has now given all banks, micro-finance, and CRBs three months to start using the new template.
In the template, the institutions are supposed to classify non-performing loans according to guidelines which dictate that any loan that is past due date by 180 days shall be classified as doubtful.
The financial institutions will also have to forward customers’ information to CRBs on a daily basis to ensure that the information is up to date and those who have resumed servicing their facilities are not listed as defaulters.
A recent report by one of the CRBs indicated that more than 2.7 million Kenyans have been blacklisted for defaulting on mobile loans.
The report further indicated that of the 2.7 million, about 400,000 were listed with the bureaus due to loans of Ksh 200 and below.
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