This archive report was first published on 11 July 2019.
On July 11, 2019, the Central Bank of Kenya (CBK) issued a circular directing all mobile loans to operate as normal loans where a customer will be considered to have defaulted after six months.
As part of efforts to implement this directive, 12 firms under the Digital Lenders Association of Kenya (DLAK) are working on a real-time credit information system, known as the Credit Information Sharing System (CISS).
According to Ivan Mbowa, East Africa Country Manager at Tala, the CISS will help to tame the culture of defaulting from one mobile lender to another.
“The real-time credit information system will help us see just how much indebted a customer is, and we hope other lenders to contribute the information,” Mbowa said.
He further highlighted the failure by some lenders to submit information to the Credit Reference Bureau as a major impediment to tracking a customer borrowing history.
“From our finding, listings on CRB is not timely. This makes it difficult to track a customers’ lending habits since some borrow more than once or twice a month from different lenders,” Mbowa said.
Already, over 400,000 people have been blacklisted for defaulting on loans of Sh200 and below.
DLAK has also generated a code of conduct aimed to regulate affiliates to the body, including rules on consumer access to clear pricing and data privacy.
