The writer of this story was listed on CRB from a KCB MPesa loan amounting to Ksh 26 after it defaulted past two weeks. The writer was not informed about plans to name submission.
Now, loan defaulters will have to get notified before they have their details submitted to the dreaded Credit Reference Bureau. The move will come from a new law by the Central Bank of Kenya that is meant to protect loan defaulters who get enlisted unknowingly.
The pending law will require loaning institutions to inform the customers appropriately before reporting them. The law however prohibits saccos, banks and microfinances. It is not clear if loaning apps will be included.
Mobile lending apps that are not affiliated to any bank are not controlled by the Central Bank of Kenya.
“An institution and a third party credit information provider shall notify the customer within one month before a loan becomes non-performing that the institution shall submit to a bureau the information on the loan immediately it becomes non-performing,” reads the draft law in parts.
From the law, any customer to a financial institution will be acknowledged and will also have a right to know any information about them submitted to any credit reference bureau.
On several occasions, CBK governor Patrick Njoroge has hinted an attack against banks which use the credit score to harass customers. In the place, Njoroge advocates for banks using good credit scores for customers to improve their loan eligibility.
The menace of mobile lending apps however remain unsolved.