Over 500,000 Kenyans listed by various credit reference bureaus (CRBs) owe less than 200 shillings, it has emerged.
All the ‘victims’ took their loans from mobile loan apps, which have become popular across Kenya’s middle and low class income earners population. Most of them are youths between the age of 18 to 24 years.
Currently, there are over 500 mobile loan lenders who issue micro-loans to Kenyans, defined by short repayment period and high interests.
Read: Parents With Fees Arrears To Be Listed On CRB – CS Magoha
The shortest repayment period is one week while most apps give their borrowers one month to repay loans. Upon default, most people’s names are forwarded to CRBs after one or two warnings.
Central Bank of Kenya (CBK) governor Dr Patrick Njoroge directed commercial banks and microfinance institutions not to list a borrower on the CRB until one has failed to pay within 6 months after the maturity of the loan. The directive is to become effective in 3 months.
In a presentation in parliament yesterday, Njoroge singled out Tala, Branch and Okash as institutions that could be used in money laundering.
Read: KRA Seeks To List Tax Evaders, Defaulters On CRB
Njoroge said that there is a lacuna in law, since there is no specific law targeting these institutions which are credit-only financiers.
“There are gaps because we have laws for commercial banks and not credit-only institutions that use individual resources for lending. In fact, these institutions are nothing but shylocks,” said Njoroge.
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874. You can also find us on Telegram through www.t.me/kahawatungu
Email your news TIPS to Editor@Kahawatungu.com — this is our only official communication channel
