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Entrepreneurs have been advised to keep a healthy record at Credit Reference Bureau (CRB) or risk deadly repercussions when in need of a loan from commercial financial institutions.

It is emerging that the CRBs have become the crippling financial ogre which can kill local entrepreneurs’ efforts to access funds with hundreds of thousands of enterprising businessmen and women locked out of accessing credit or loans.

Some are in trouble because they either have been wrongfully or rightly registered at the CRB yet they are not aware.

The worst aspect of the confusion is the fact that even if you borrowed as little as Sh1,000 from your M-shwari account, failed to pay it within the stipulated time, you are issued with all manner of threats before being listed by CRBs.

One of the victims, an entrepreneur who was set to begin a food processing production line in Nairobi, Jonathan Kasuleka said: “I applied for a business loan from one of the leading financial business institutions worth more than Sh2.54million to boost the enterprise but I was denied the loan because of the CRB mess.”

Kasuleka said the commercial financial institution (name withheld) instructed him to get a clearance certificate from CRB, but it denied him the certificate

He was told he had not cleared a Sh1,000 loan from his Mshwari account that he had completely forgotten about because of the tiny amount involved.

After pleading with the Bureau’s employees who refused to advice him on the way forward, Kasuleka said he went back to M-shwari and cleared all the amounts required including any accrued interest that came to under Sh2,000, but inflated to Sh12, 540 for him to go ahead with his development programme, but that was not to be.

“This is because although M-shwari personnel promised to clear my name from the CRB blacklist, they did not and both sides started playing frustrating games that saw me never getting any Loan Clearance Certificate for me to move on.

“It was an unbelievable to lose a loan of that amount simply because of Sh1,000 credit that you spend in less than an hour,” he said.

The businessman’s tribulations is just an example of a range of entrepreneurs and ordinary workers across the country who spoke to Business Hub in a series of on phone and physical meetings for this story.

Another loanee, Josephine Cherono a professional with a corporate organisation from 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.

“Athough I had a historic clean record with them they told me I had to get clearance from the CRB where I was blacklisted,” she said.

Black books

Cherono said that she had been either erroneously or maliciously  black listed over a Sh150,000 she had secured and cleared in July 2018, but her name remained on the CRB black books which denied her the emergency loan, but took her nearly a year to clear her name.

All these are happening despite 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.

The problem is not only rife in commercial institutions, Savings and Credit Co-operatives (Saccos), micro and macro financial institutions but also Car Log Book Loans entities that claim to give credit to applicants in a matter of hours.

A senior lawyer Counsel John Kizzilah said Kenya is a developing economy and CRB should be totally 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 on credit reference bureaus (CRBs).

So far there are only three registered CRBs, among them Metropol Credit Reference Bureau Ltd.

Speaking to Business Hub, 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.