This archive report was first published on 13 November 2019.
On November 13, 2019, the removal of the rate cap marked a significant shift in Kenya's lending landscape.
However, the continued refusal by financial institutions to make positive use of customer credit scores is worrying, as it hinders good borrowers from benefiting from cheaper credit.
Instead, credit reference bureaus have been used by lenders as a tool of coercion to ensure loan repayments, given the negative connotation of a listing.
Repeated directives by the regulator to ensure the use of positive listings when lending have been ignored, leading to risk-based lending practices that can potentially cut the cost of credit for many Kenyans.
Now, lenders must demonstrate that they are not returning to predatory lending practices that punished good borrowers alongside the bad.
