How M-Shwari Loan Could Turn Your Life into a Living Nightmare-Thanks to CRBs

“I lost property in a road accident early this year, and had to go for an emergency loan from my bankers, “although I had a clean record with them they told me I had to get clearance from the CRB where I had been blacklisted,”-Josephine Cherono

By The Weekly Vision

Entrepreneurs have been advised to keep a healthy loan record with the Credit Reference Bureau (CRB) or risk suffering heavy repercussions when in need of an urgent loan from lenders.

CRBs have become the crippling ogre which may easily kill an entrepreneur’s dream. Thousands of enterprising business people are currently locked out from accessing credit as a result of their poor records with CRBs.

Some are in trouble because they either were mistakenly registered at the CRB or are not even aware they owe money, even if you borrowed as little as Ksh1, 000 on your M-Shwari account and for some reason forgot to pay within the stipulated time; you are a candidate and risk being black listed as a defaulter by CRBs.

Director Sam Omukoko,Metropol Managing Director

One of the victims, an entrepreneur who was set to begin a food processing line in Nairobi, Jonathan Kasuleka said: “I applied for a business loan of Ksh2.54 million from one of the leading financial institutions to boost the business but was denied a loan because of the CRB mess.” Mr Kasuleka said the commercial financial institution (name withheld) instructed him to get a clearance certificate from CRB, they denied him the clearance certificate unless he paid them Ksh. 2,500. After pleading with the CRB, Kasuleka said he went back to M-Shwari and cleared the outstanding loan including the accrued interest. “It was an unbelievable experience losing out on a loan simply because of Ksh1, 000 that I forgot to pay,” he said.

The businessman’s tribulation is just one of the many cases ordinary people across the country go through daily. Josephine Cherono a professional with a corporate organisation in Eldoret said: “I lost property in a road accident early this year, and had to go for an emergency loan from my bankers of more than 15 years. “Although I had a clean record with them they told me I had to get clearance from the CRB where I had been blacklisted,” she said.

Cherono said that she had been either erroneously or maliciously blacklisted over a Ksh. 150, 000 loans she had secured and cleared in July 2018, but her name remained on the CRB black books which denied her the emergency loan. All of these are happening despite the Central Bank of Kenya (CBK)’s fresh regulations to tackle and streamline challenges loan seekers had been facing with CRB over the years since their establishment. A senior lawyer Counsel John Kizzilah said Kenya is a developing economy and CRB should be banned. There is no money in Kenya, let those companies stop killing the nation’s enterprises for greed and corruption.

According to the CBK new credit regulations are intended to protect borrowers, especially those at risk of being blacklisted by credit reference bureaus (CRBs). So far there are only three registered CRBs, among them Metropol Credit Reference Bureau Ltd. Speaking to The Weekly Vision, Metropol Managing Director Sam Omukoko said individuals or businesses will always get a clearance certificate if they don’t have a negative listing on their credit report from the lenders. “If you have a negative listing on your credit report, you will be issued a credit status certificate,” he added. Omukoko said borrowers with active non-performing loans should liaise with their financial institutions to restructure their loans to avoid being listed at the Credit Reference Bureaus after the six-month grace period offered by the government lapses in September this year.

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