CRBs Respond to Ruto’s Directive on Loan Defaulters

  • File image of Kenyan banknotes
    File image of Kenyan banknotes
  • Credit Reference Bureaus - CRBs have lauded the move by President William Ruto to review  the listing mechanism of loan defaulters for ease access to credit facilities.

    Speaking to the Media on Wednesday, September 13, Creditinfo, one of the three licensed CRBs in Kenya said that the move by the President will benefit more borrowers in the country. However, the company demanded for a measure to allow more access to data.

    “Credit bureaus for a good number of years have been providing credit scores in the buckets, unfortunately for a very long time the bureau date has been used as an exclusion. Part of the review should be how to access and share more data,” stated Kamau Kunyiha Regional Managing Director of Creditinfo.

    Credit Reference Bureau (CRB) listing
    Credit Reference Bureau(CRB) listing

    Currently the Credit Reference Bureau has only three licenced Operators, Creditinfo Group, TransUnion and Metropol.

    According to Data by Metropol, the number of CRB listing stood at 14,035,718 by January  2020. President Ruto and his Deputy Rigathi Gachagua have maintained that the listing is hurting millions of Kenyans especially youths.

    In an earlier interview, Metropol Managing Director Sam Omukoko had noted that most of the defaulters are not willing and unable to pay their loans.

    Most of the loan defaulters have borrowed through digital lenders and banks, which has been made easier because of mobile banking.

    Upon defaulting on the loans, the borrowers are listed by CRBs  and get a low credit score, making it hard to get the much-needed credit facilities.

    Banks and other lenders shun borrowers with poor scores because of the high risk of default, should you secure another loan.

    As part of the measures to review CRB listing, the President in his inaugural speech explained how he will put measures to end the current practice of arbitrary and all nothing blacklisting of borrowers.

    “We shall take measures to drive down the cost of credit.Our starting point is to shift the Credit Reference Bureau (CRB) framework from its current practice of arbitrary, punitive and all or nothing blacklisting of borrowers.”

    Should Ruto revise the listing system, millions of Kenyans would breathe a sigh of relief, with data showing that at least Ksh 2 billion is borrowed daily through mobile lending.

    Jirani Smart Micro Credit Offices
    Jirani Smart Micro Credit Offices