Under the CBK Act, 2021, the Central Bank of Kenya will have the power to revoke licenses of digital lenders who have been using debt shaming tactics to recover loans
A presidential directive banned the listing of borrowers with loans of less than Sh5 million on Credit Reference Bureaus for one year
Samuel Warutumo was at work on November 4, 2021, when he received a message on his phone about a loan he had taken with a digital lending app. "Samuel, be informed that we will report you to the CRB unless you pay your loan of Sh8,486 in full by midnight today!" A few minutes later, he got a call from his mother who had also received a notification urging her to ask Samuel to repay. Close to 20 people from his phone book were called, which culminated with a call to his boss.
"I had defaulted on the mobile loan by three days because I was waiting for my salary," he says. This is the type of debt-shaming which thousands of digital borrowers have been subjected to by mobile lenders seeking to recover loans. But this threat now belongs to the past. This follows the new Central Bank Bill, 2021 that became law on December 7, 2021.
