Central Bank of Kenya Requests Banks to take Additional Loan Pricing Criteria into Account.
In order to extend loans at an acceptable price, the Central Bank of Kenya (CBK) has urged lenders to take into account factors other than a borrower’s credit score.
This is in light of worries that creditors are blacklisting and denying credit to consumers by relying on negative records generated by credit reference bureaus (CRBs).
A standard statement stating that “a client’s credit score should not be use as the only basis by a lender to reject a consumer a loan” should appear at the top of every credit report, as requested by the regulator. These are a component of CIS system changes aims at reducing the cost of loans for micro and small firms.
Blacklisted loan accounts are becoming more prevalent, which has decreased the likelihood of Kenyans being able to borrow more to grow their businesses or invest in projects.