It’s ironic how institutions are using the name CRB to threaten their users which is against the stipulated regulations. A month ago, I decided to Okoa Stima because I was in a tricky situation. The service is good because it allows Safaricom and KPLC customers to avoid power disconnections. So, to shine some light in my house, I registered for Okoa Stima and borrowed an amount within my limit.
One month later, I got a text from Okoa Stima; the text read,” Dear Customer, please repay your outstanding loan of **** which is overdue by 21 days to avoid being listed in the CRB for defaulting on Okoa Stima.
Jared Gatenga, the CEO of CIS Kenya was amazed when Kachwanya.com sort from him on the text “It’s a shame how such an institution or service can use CRB to threaten people. CRBs are here to help Kenyans and other financial institutions. The bureaus are meant to uplift the economy and Okoa Stima is not CIS member that implies that they cannot share to CRB.”
The CEO further provided that, if a person applies for a credit card or a loan, ordinarily he has shared his whole life that is the personal information. This information will find its way to another party who will store it for the benefit of another party. Therefore, “Credit Information Sharing is a process where credit providers such as banks and licensed Microfinance Banks submit information about their borrowers to licensed Credit Reference Bureaus (CRBs) so that it can be shared with other credit providers.” The CEO added.
Legal grounds
Initially, banks were obligated to submit negative data to licensed CRBs. This information included: Non-performing loans, dishonor of cheques other than for technical reasons, accounts compulsorily closed other than for administrative reasons, proven cases of frauds and forgeries, proven cases of cheque kitting, false declarations and statements, receivership, bankruptcies and liquidations and tendering of false securities.
The information shared to CRBs can be reinstated if found to be correct after due investigation by the CRB and the bank.
Ideally, financial institutions are not allowed to propagate false information about CRBs since the Consumer Protection Act and several other pieces of legislation including the Credit Reference Bureau Regulations place premium on protecting the rights of a consumer, so if Okoa Stima threatens you with a text, you have the right to follow up on the same or contact Tatua Center for clarification.
“CRBs are required to prepare a credit report from the information they have on a customer. A negative listing on a borrower’s credit report does not mean that one cannot access a loan facility any more. It only means that lenders will treat you with more caution while appraising your loan, which might result to more stringent loan terms.” Erick S, Onderi, the deputy registrar at Tatua Center said.
“Licensed CRBs are required under the CRB Regulations to hold information on non-performing loans and other negative information submitted to them by banks for at least 5 years.” He added.
Last year, Okoa Stima was sued by Colour Planet for violating ownership rights. The IT Company claimed that it had registered “Okoa Stima” trademark name with the Kenya Industrial Properties Institute because they wanted to use the name as electricity purchase software.
