Commercial lenders in Kenya have removed over 1.3 million people from Credit Reference Bureaus (CBR). This has been done over the past five years to December 2023 following interventions by the government through the National Treasury and the Central Bank of Kenya (CBK).
These interventions have required lenders to remove small-time personal loan defaulters from listed on CRB. According to data from licensed credit reference bureau Creditinfo, listings on CRB declined by 1.27 million account to 933,551 at the end of the year 2023.
This translated to a drop of 57.7 per cent from the 2.2 million listings on CRB as at December 2019. In 2023 alone, negative CRB listings fell by 203,098 compared to the listings of 1.13 that were done in the year 2022.
“This shar decline can be explained by changes in the regulatory framework that were introduced from 2020,” the report by Credit info stated. The report was released by the Financial Sector Deepening (FSD) Kenya, Creditinfo and Credit Information Sharing Association of Kenya (CIS Kenya).
The removals from CRB listings were higher among companies. The data from Creditinfo shows that the number of listed company defaulters fell from 7,289 in 2019 to 2,665 as at December 2023. This translated to a drop of 63.4 per cent. Between 2019 and 2020, the number of new listings on CRB fell by 777,388, a drop of 35 per cent.
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The report by Creditinfo noted that one of the main contributors of the reduced listings was the CBK’s regulation that barred unregulated digital credit providers, credit-only institutions, and other third parties from listing borrowers with any of the licensed CRBs including Creditinfo, Metropol, and TransUnion.
“CBK withdrew the approval granted to unregulated mobile-based and credit-only lenders as third party credit information providers to CRBs. It is important to point out that some of these providers used to submit only negative credit information to the CRBs,” the Creditinfo report stated.
