Digital Lenders Threaten To Publish Names Of Defaulters

Digital lenders in Kenya are threatening to publish names on newspapers of Kenyans who have defaulted on their loans.

The threat by digital lenders comes as the last desperate move to recover their cash currently in the hands of Kenyans after the Central Bank of Kenya (CBK) stripped them of powers to list defaulters with credit bureaus.

Initially, digital lenders had powers to avail names to CRBs of those Kenyans who would delay or fail to pay back their loans, but not anymore, meaning they are now banking on trust.

The CBK took away powers from digital lenders of submitting names of defaulters to credit bureaus. It also ordered all those blacklisted for owing 1,000 shillings and below to be delisted “with immediate effect.”

READ: 65% Of Kenyan Borrowers To Default Loans This Year, KBA

The number of Kenyans who had been listed on CRB was above 3.7 million. It was also noted that more than 500,000 Kenyans who had been listed owed 200 shillings and less. 1,000,000 owed 1,000 shillings and less.

CBK moved to regulate digital lenders by clipping their influence after it was established that the majority of them were exploiting Kenyans by charging higher interest rates and infringing on their privacy.

At one time, CBK Governor, Dr. Patrick Njoroge described digital lenders as Shylocks who operate on digital platforms to steal from poor and desperate Kenyans.

Kenyans say the threat to publish their names on local dailies won’t work and that it will only fuel those who owe them refraining from paying back the loans.

There are more than 500 digital lenders in Kenya and more than 70 loan apps. Millions of Kenyans preferred taking loans from these apps despite higher interest rates because the majority of them did not require too much information.

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