June 16, 2021Kenya
624 digital loan firms barred from sharing client data with CRBs
The Central Bank of Kenya (CBK) locked out 624 digital lenders and credit-only providers from sharing information on loan payments and defaults last year in the wake of customer complaints. Fresh data shows that Kenya had 1,994 third-party data providers allowed to share borrowers’ loan defaults and payments with Credit Reference Bureaus (CRBs), a 23.8 percent drop from 2,618 firms licensed the previous year.
The banking regulator attributed the drop to the ban, which followed protests over widespread misuse of the credit information exchange (CIS) mechanism.
It is important to note that CRBs can contact third parties, including digital lenders, for information on loan payments and defaults to share with banks, microfinance institutions, and saccos.
