Over 3.2 Million Kenyan Loan Defaulters Have Been Blacklisted On CRB

The number of Kenyans who have defaulted loans and have been blacklisted on the Credits and Reference Bureau has risen to 3.2 million.

According to data from the CRB, the number has increased from 2.7 million in 2019 with most people having defaulted loans from digital lenders.

The number of bank loan defaulters also rose by 12 percent from 9.5 percent as data from CBK revealed.

Billy Owino, CEO of TransUnion Kenya said: “As of Friday last week, 3.2 million Kenyans were negatively listed against a total of 11 million records.”

Mr. Owino noted that the majority of those blacklisted on CRB are defaulters of digital loans and have borrowed an average of 2,500 shillings.

In recent days the number of mobile digital lenders has soared tremendously with most Kenyans going for them since they offer soft and instant loans.

However, the interests charged on the loans are way too high, leaving the borrowers unsure of whether to pay the loans or not.

Despite the interests charged on digital loans being high, efforts by the Central Bank of Kenya to regulate them has witnessed a slow.

Tala and Branch, for example, charge 12.7 percent and 7.6 percent respectively for loans that go beyond one month. Safaricom’s Mshwari, also the market leader, charges 7.5 percent irrespective of the loan duration.

Since Tala and Branch are not regulated, loan defaulters from these lenders are not captured in the CBK’s data.

The CBK data revealed that loan defaulters have increased by 55.6 percent over a period of three years reaching over 333.3 billion shillings in loans.

The increase in loan defaults can be attributed to the massive job losses that Kenyans have witnessed in recent days.

The number is likely to go up owing to the current Covid-19 crisis that has left most people jobless, some having pay cuts and some going for long unpaid leaves.

In just a period of two weeks, about 4 million Kenyans have lost their jobs because of the pandemic with UNDP predicting a worse scenario in the coming days.

Africa as a whole has been told to prepare for the worst, not just in terms of infections and deaths, but also in terms of job losses and other incidences.

“With an estimated 55 percent of the global population having no access to social protection, these losses will reverberate across society, impacting education, human rights, and, in the most severe case, basic food security and nutrition,” UNDP said.

Africa risks a “massive reversal of gains made over the last two decades, and an entire generation lost, if not in lives, then in rights, opportunities, and integrity.”