The number of mobile loan accounts blacklisted in Kenya has increased by over three million, according to a report by Metropol Credit Reference Bureau (CRB). The bureau stated that the number of negative listings rose from 16 million in 2019 to 19.97 million in 2021, with the majority of the increase attributed to the popularity of Fuliza loans provided by NCBA bank. As the cost of living continues to rise, Kenyans have increasingly relied on mobile loans to meet their daily expenses.
In an effort to improve the credit standing of mobile phone borrowers listed by CRB, the Central Bank of Kenya (CBK) introduced a credit repair framework in November 2022. Lenders are required to offer a 50% discount on outstanding digital loans as of October 2022, and borrowers have until May 31, 2023 to pay off the remaining loan balance. Once the loan is cleared, their CRB ratings will be reviewed.
Despite these efforts, the number of negatively listed mobile loan accounts has continued to rise. In 2020, the number of blacklisted accounts stood at 18.9 million. However, the CBK has taken steps to support the digital lending industry by issuing licenses to ten more digital lenders in March 2023. This brings the total number of licensed Digital Credit Providers (DCPs) to 32, following the licensing of 2022 DCPs in January 2023.
The CBK has urged the remaining players in the market to submit necessary documents for approval, as it received applications from 401 DCPs. The regulator’s efforts to support the industry, combined with the credit repair framework, are expected to improve the credit standing of Kenyans and reduce the number of blacklisted mobile loan accounts in the future.