Kenya Insights

Tag: CRB

  • President’s Directive A Relief To Millions Blacklisted With CRB

    President’s Directive A Relief To Millions Blacklisted With CRB

    President Uhuru Kenyatta has directed the National Treasury to effect a moratorium of listing in CRBs, for loans less than Ksh 5 million for a period of 12 months to end September 2022.

    This is according to a directive by President Uhuru Kenyatta who was speaking during the Mashujaa Day celebrations held in Kirinyaga County.

    In his directive the president said borrowers with loans below Ksh. 5 million listed with CRBs from October 2020 to date will not have that listing incorporated in their credit reports for the next 12 months, ending September 2022.

    “In addition to foregoing measures and to accelerate our economic recovery, I urge all banks and financial institutions to accommodate customers who seek to restructure their banking facilities,” urged President Kenyatta.

    Digital financial services

    In recognition of the importance of digital financial services, especially to the small scale traders and the household at large the president directed the Treasury to engage all digital payment providers with an aim of deepening and expanding the use of digital payment channels.

  • Businessman in Sh24 debt loses bid to delist firm from CRB

    Businessman in Sh24 debt loses bid to delist firm from CRB

    The owner of the company that was listed in the Credit Reference Bureau (CRB) for defaulting to offset a Sh24 debt has lost the bid to have Ecobank pay him damages for alleged defamation.

    Charles Gitundu Mwangi, the proprietor of Rural Technology Enterprises Ltd was listed on the CRB in December 2013 after he failed to convince the High Court that the information provided by Ecobank to CRB was defamatory and caused his company losses.

    Mwangi told the court that the information that the bank relayed to the CRB was a ploy to paint Rural Technology as a broke company without financial integrity and without capability to meet financial obligations after Justice Maureen Odero faulted him for leaving his coperate dormant for three years hence attracting bank charges.

    “I find that although it may have been petty for the bank to forward the company’s name to CRB for a debt of only Sh24, it was certainly not illegal or unprocedural for the lender to do so. The account was in debit and no matter how small the amount, the money was owed to the bank.” Justice Odero said.

    Evidence presented in court shows that Mr Mwangi opened the account in 2010, deposited Sh3,000 and a cheque of Sh10,000 then he went quiet without any activity in the account until his firm was listed on the CRB in December 2013 over Sh24 debt.

    But Mwangi claimed that he never borrowed any loan from the bank meaning it was wrong for them to forward information about his company to CRB for ‘allegedly’ defaulting to settle the loan.
    He was however faulted for failing to check on the status of his firm’s account regularly and for ignoring the alerts from the to settle the small charges but he argued that his company was never officially notified about the debt and has never been granted an opportunity to pay it.

    Mr Mwangi maintained that the company never borrowed a loan adding that the  account was dormant and therefore no bank charges ought to have been levied against it.

    “The account was in credit when I opened it and the statements issued by the bank show that no withdrawals were made. In fact, the lender was the sole beneficiary of the company’s money by charging maintenance fees,” he said.

     

  • Banks Dominate Mobile Lending With 93 Percent According To New CRB Report

    Banks Dominate Mobile Lending With 93 Percent According To New CRB Report

    A report by Credit Reference Bureau (CRB) for the seven year-long mobile lending in Kenya has revealed that Kenyan mobile loans market is dominated by borrowers aged between 31 and 50 years with the banking sector dominating the lenders list with 93 percent of the loans market.

    Image result for CRB"
    Photo courtesy

    The report shows most borrowers, at 66 per cent, are averse to borrowing from more than one lender while another 24 per cent had borrowed from two lenders, leaving about 10 per cent who took up loans from more than two lenders.

    Creditinfo chief executive Kamau Kunyiha said Kenyans appear to be risk-averse to borrowing from more than two lenders even though the market has more than 50 digital loan products available.

    “Our data also shows that the banking sector dominates the mobile lending space by a staggering 93 per cent while the other seven per cent is lent out by digital mobile apps. We based this report on the data supplied to us by lenders in order to eliminate those buts and ifs and begin a trend of information that is backed strictly by data,” said Kunyiha.

    Mobile lending has grown in Kenya which has seen the rise of close to 50 platforms in a largely unregulated sector which includes major financial players such as KCB, NCBA, Equity and Co-operative banks.

    The data was collected between November 2018 and April 2019 and constitutes information supplied by lending institutions to credit reference bureaus (CRBs) under Central Bank of Kenya rules.

     

  • CBK Directs That CRB Shouldn’t Blackist Anyone Until Six Months

    CBK Directs That CRB Shouldn’t Blackist Anyone Until Six Months

    Central Bank of Kenya has nullified listing of loan defaulters to credit reference bureau.

    Millions of Kenyans have been listed on CRB, which permanently blocks them from accessing another loan before clearing with them at a fee.

    CBK has issued a new directive to commercial banks,m stating that a borrower will only be considered to have defaulted a loan after six months and will not be listed on CRB before that.

    The directive comes at a time when lenders had forwarded more than 2.7 million Kenyans to be listed on the CRB for defaulting their loans.

    According to CBK, the directive will affect both mobile loans and normal loans, which implies that, Kenyans will only be listed on the CRB only after defaulting a loan for six months.

    However, CBK’s directive doesn’t affect digital lenders like Tala, Branch, Okash, who forward millions of Kenyans for listing on credit reference bureaus after failing to pay a loan within 30 days.

    Currently, CRB has listed more than 2.7 million Kenyans with 500,000 of them having defaulted loans of 200 shillings and below.

    Research indicates that we have more than 500 digital lenders who give Kenyans instant loans via their mobile loans.

    Currently 90 percent of borrowers in Kenya are accessing loans via mobile loan apps.

    Commercial banks, microfinance, and CBRs were given three months period to adjust and start using the new guidelines.

    Template given in the new directive will classify non-performing as per prudential guidelines which state that “any loan, which is past 180 days shall be classified as doubtful.”

    Millions of Kenyans have been calling CBK to regulate mobile money lenders who are charging exorbitant interest rates on desperate Kenyans.

    It pains many to see how CBK has thrown people’s biggest problem under the bus.

    Digital lenders have blocked financial freedom for millions of Kenyans. Something doesn’t add up in all this.

    How do you skip a complain where someone who has been forced to pay CRB sh2,200 for a clearance certificate because he was listed to to the bureau for defaulting 200 shillings?

    The same Dr. Patrick Njoroge, CBK’s governor who once termed mobile lenders as “enhanced Shylocks who use digital platforms to prey on Kenyans with high-interest rates on their micro-loans.”!