New data from Transunion Credit Reference Bureau shows that more than 500,000 people in Kenya are currently blacklisted for up to seven years with Credit Reference Bureau (CRB) for defaulting on mobile loan.
Some of the borrowers defaulttalaed on loans of as little as Sh500, reducing their future probability of getting similar or much higher loan amounts from local banks.
Currently Kenyans have access to more than 50 mobile phone loan apps, making it much easier for them to get access to these 30-days repayment loans.
Most people taking these loans cannot afford them, later defaulting on payments when it’s time to pay back. This has led to more than 500,000 people in Kenya getting blacklisted by the Credit Reference Bureau (CRB).
As soon as you get blacklisted, you cannot access another loan until you repays that loan. After repaying, you may still remain in CRB’s book with a low credit rating for up to seven years, a situation that can keep banks from extending a loan to you within that blacklist period of seven years.
Transunion Chief Executive Officer Billy Owino said most of these individuals are finding themselves blacklisted for lack of information on the penalties of defaulting paying a loan, which can even be as little as Sh500.
“Most of the borrowers do not know how they got blacklisted. We get like 200 calls daily from individuals in this category asking how they ended up in the blacklist,” said Mr Owino.
Kenyans have a pattern of borrowing from a number of platforms at the same time, without thinking about the risk they are putting themselves into, also the lenders don’t take time to check what other platforms these people have borrowed from before they give them the loans.
Considering in Kenya we have more than 50 mobile loan platforms, an individual can borrow from Tala App, M-Shwari and other platforms in a single day, and get the cash from all of them.
This is possible because most of the mobile and online loan platforms process the loan in a few minutes without checking the borrowing habits of that lender using the data provided by Credit Reference Bureau (CRB).