Belgut Member of Parliament Nelson Koech has tabled a bill seeking to abolish the Credit Reference Bureau listing process.
The legislator initiated the process to scrap this law that has seen hundreds of thousands of borrowers listed with the CRB for defaulting small loans.
Koech stated it was unfair that small loan defaulters were being listed together with people that had defaulted billions of shillings.
Belgut MP Nelson Koech speaks during a funeral service at Motero Village in Soin/Sigowet constituency.
He also blamed mobile loan apps for the sharp increase in the drop of people’s credit scores thus limiting their accessibility to loans that could help in the reduction of unemployment by promoting entrepreneurship.
“Why would a Ksh1 billion defaulter be treated the same way with a mobile loan defaulter? We also don’t see why employers should be using CRB as part of the recruitment process and this must be scrapped,” Koech explained.
Daily Nation reported that the MP proposed for the process to adopt the United Kingdom way of dealing with defaulters where you are not listed but your creditworthiness is evaluated and you are given points.
“Lending institutions should resort to the conventional means of recovering their debts without sharing the borrower’s information to non-parties, the sharing of borrowers information with listing claims as low Ksh100 has denied growth to enterprising youth,” he added.
If the bill is passed, it will a big blow to lenders as recent data shows that over 500,000 Kenyans have been blacklisted with the CRB up from 150,000 three years ago.