In the recent days, borrowers have not only been subjected to high interest loans, but the conditions for borrowing and repayment histories of the borrowers is the new nightmare.
Lenders have greatly embraced credit sharing information which has seen a great decline in the amount of bad debts. The information provided by Credit Reference Bureaus has helped lenders comb through sufficient information about people who apply for loans.
Barely a month after a black list of poor loan payers was released, Micro Finance Institutions (MFIs) have said they will be submitting a list of defaulters to credit reference bureaus for blacklisting. In a report published in April by Financial Services Deepening (FSD Kenya) – a non-profit organisation that monitors the financial services industry – says the build-up of consumer information had resulted in the listing of 203,518 individuals and 9,954 businesses as bad debtors by April last year.
Micro Finance Institutions which are the largest short term loan givers want to submit their blacklist to the credit reference bureaus for fear that they could be loaning money to thousands of Kenyans who are already on the existing blacklist. Customer information held by lenders is considered confidential and therefore the MFIs will be seeking legal clarification as they address the issue.