Central Bank of Kenya Cracks Whip on Unregulated Digital Lenders By Denying Them CRB Access


central bank of kenya

Today, the Central Bank of Kenya has announced that they have terminated access to the credit reference bureaus (CRBs) to rogue mobile money lenders.

“With immediate effect, CBK has withdrawn the approvals granted to unregulated digital (mobile-based) and credit only lenders as third party credit information providers to CRBs,” the regulator said.

Well now with today’s announcement of the publication of the Credit Reference Bureau regulations, 2020, this means that the rogue lending apps decision to blacklist Kenyans in the CRB might be a thing of the past.

Central Bank says the decision to do this is a response to numerous public complaints over the misuse of Credit Information Sharing (CIS) services by the unregulated digital and credit-only and particularly by their poor responsiveness to customer complaints.

This means that with immediate effect, these unregulated digital and credit only lenders will no longer submit credit information on their borrowers to CRBs.

The taming of rogue lending apps has been in the pipeline for some time now. It started back in 2018 when the CBK governor started lobbying for tough policing of digital lenders. On February this year, the Central Bank and the National Treasury said they were working on taming these predatory lending apps. Google also tackled the predatory loan app problem on their app store last year.

The Central Bank will also suspend for 6 months the listing of negative credit information for borrowers whose loans were performing previously but have been non-performing from April 1st 2020. Also, loans that fall in arrears from April 1st to September 30th 2020 will not lead to the borrower being blacklisted on the CRB. This was announced before during the emergency measures that were announced by the CBK back in March 25th due to the coronavirus pandemic.