The Central Bank of Kenya has put up new rules in place with regards to the Credit Reference Bureau listing loan defaulters. This comes a day after the state’s treasury read the annual budget for the year and two days after the amendment of the Employment Bill. The Central Bank of Kenya Digital Credit Providers regulations stipulate that the lenders are required to notify loan defaulters 30 days before submission of their details to the CRBs. In addition to that, the CBK insists that the 30-day notice must be done in writing or through electronic means. This was all recorded in Gazette Notice No. 45.
Part of the new law to be implemented reads, “A digital credit provider who intends to furnish negative information to a bureau with respect to a customer shall, in writing or through electronic means, notify the customer of the intention to submit the negative information at least thirty days before submitting the negative information to the bureau.”
After the loans defaulter’s details are submitted to the CRB, the digital lenders are by law required to notify their customers of the same.
They added, “Digital credit providers who have furnished credit information to a bureau shall, within thirty days from the date the information was furnished to the bureau, notify the customer that the customer’s credit information has been forwarded to the bureau.”
There is, however, an exemption to the sharing of information with the CRBs. Loans defaulters with an outstanding balance of more than Khs.1000 and below will not have their details forwarded as the digital money lenders have been banned.
“A digital credit provider may obtain credit information of its customers from a licensed Credit Reference Bureau, where such information is reasonably required for the discharge of the functions of the Digital Credit Provider or the licensed Credit Reference Bureau. However, a digital credit provider shall not submit negative credit information of a customer or any other person to a Credit Reference Bureau where the outstanding amount relating to the credit information does not exceed one thousand shillings.” Reads part of the regulations.
The measure undertaken by the CBK is all in a bid to tame the many loan defaulters in Kenya as many Kenyans rely on loans from Credit institutions given the short time loans take to be processed. The new law was also mentioned by National Treasury Cabinet Secretary, Ukur Yattani, in his annual country budget unveiling at parliament on Thursday, April 7.
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The move by the regulating monetary policy agency comes days after President Uhuru Kenyatta signed the amendment to the Employment Bill which bars potential employers from asking for CRB clearance for job seekers unless they are offering them employment.
