Plive.co.ke Logo
Go

Finance Half a million Kenyans blacklisted for defaulting on loans — and it signals a worrying trend

  • Published:

The number has shot up from 150,000 three years ago

play Half a million Kenyans blacklisted for defaulting on loans (Courtesy)

At least 500,000 Kenyans are listed with the credit reference bureaus (CRBs) for outstanding mobile loans as low as Sh500 ($5).

Fresh data from the Transunion Credit Reference Bureau shows that the number has shot up from 150,000 three years ago, reflecting a 233% increase.

play At least 500,000 Kenyans are listed with the credit reference bureaus (CRBs) for outstanding mobile loans (Courtesy)

 

The high number of those blacklisted has been attributed to the presence of many mobile applications providing loans with over fifty such platforms currently in operation.

Transunion Chief Executive Officer Billy Owino said most of these individuals are finding themselves blacklisted for lack of knowledge on the consequences of defaulting paying a loan.

Profiling clients

He also faulted the lending platforms for failing to fully utilise information from the CRBs when profiling clients.

play Transunion Kenya Chief Executive Officer Billy Owino. (Standard)

 

“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,” Mr Owino said in an interview with a local newspaper.

The lenders, Owino said, do not take time to check what other platforms these people have borrowed from before they come asking them for loans.

play Individuals end up being blacklisted by CRB after failing to repay loans under a 30-day period. (Courtesy)

 

Individuals end up being blacklisted by CRB after failing to repay loans under a 30-day period.

Even after repaying, the debtor remains in CRBs book with a low credit rating for seven years, a situation that can keep banks from extending a loan to him for that period.

Subscribe to the Pulselive Newsletter!