Local Bank Lowers Credit Limit to Zero for Blacklisted Borrowers

KCB Bank takeover NBK

After the government ordered the Credit Reference Bureau to delist blacklisted Kenyans, so they can have access to credit during this pandemic, financial institutions turned their backs on these borrowers slapping them with very stringent rules on how to get loans from them. Many Kenyans who rely on loans from banks and other digital lenders for financial help were frustrated by the new regulations that had been put in place by the banks.

The National Treasury was forced to intervene with a Ksh 2 Million fine for any financial institution that refuses to lend to a blacklisted borrower, with the hope that these borrowers will still access credit.

“An institution that denies a customer a credit facility or any other financial service solely on the basis of a credit score shall be liable to a monetary penalty of two million shillings or such other sanctions under the Act, the Microfinance Act, 2006, or the Sacco Societies Act, 2008, as the Central Bank may impose,” says Treasury Secretary Ukur Yatani in the new CRB regulations.

But the banks have played a smart card, frustrating these borrowers the more. It has become public knowledge that the Kenya Commercial Bank (KCB) has lowered credit limits to zero for its customers blacklisted in CRB. This new loan limits came into effect almost immediately after the government made threats with a monetary penalty. The previous loan limits had been maintained for over a year.

“Now to evade this, KCB has deactivated all the loan limits that they had allocated to their customers who are listed with the CRB. For example, a client whom they use to notify that she qualifies for a loan of Ksh54,000 now has zero limits,” noted one borrower.

“Yeah I was having a limit of 5000 from KCB, but they have put my limit to 0.00…this is Kenya real-life… nothing of prosperity and bank are good at making sure you can never make it,” claimed another.

It is alleged that other local financial institutions have followed suit, completely locking out these borrowers from accessing any credit.