Kenya has over 46 digital loan apps busy dishing out cash to anyone at a small fee. Recent data shows that more than half a million Kenyans have been blacklisted by the Credit Reference Bureau up from 150,000 three years ago, courtesy of growing numbers of mobile applications providing loans.
Belgut Member of Parliament Nelson Koech has expressed his concerns saying it is uncouth for lenders to treat defaulters of billions of shillings the same way as those who have borrowed Sh100 from mobile loan providers such as CBA’s Mshwari and Tala.
According to the legislator provisions for the Credit Reference Bureau, listing repealed and a new bill should be tabled to have the amendments to see Kenya operate like the United Kingdom one where one is not listed but their creditworthiness is rated and given points.
“Concerned that listing by lending institutions through the Credit Reference Bureau is stifling growth especially among the youths. I propose to have the enabling provisions of the Credit Reference Bureau repealed. Lending institutions should resort to the conventions way of recovering their debts without sharing borrowers information with non-parties. The practice of sharing borrowers information with the listings with claims for as low as Ksh 100 has denied growth to enterprising youths. In that regard, I seek repeal of Credit Bureau Regulations 2013, which were drafted in the exercise of the power conferred by section 31(3),4 and 51(1) of the Banking Act and section 34(4), 5 and 48(2) of the Microfinance Act 2006,” read his letter to the National Assembly.
In the event, his proposition to amend the Credit Reference Bureau Regulations 2013, mobile money lending apps could shrink because of high default rates by the borrowers. Imagine the peace of mind and the financial freedom that could tag along when you realize, you can still borrow elsewhere without being criminalized for being a one time defaulter of one hundred shillings you borrowed on this digital apps.