Ideally, one should settle their outstanding KCB M-Pesa loan after CRB listing charges, obtain CRB clearance, and then work on repairing their damaged credit history.
Despite facing competition from Fuliza and other lenders, KCB MPesa loan service reportedly generated a revenue of Ksh 600 million after disbursing Ksh 42 billion in the fiscal year ending March 2023.
However, a significant number of borrowers have been listed due to defaults and are struggling with how to manage their KCB MPesa loan after CRB listing charges.
Rebuilding a credit record might involve various strategies, including regular savings with KCB MPesa and frequent use of MPesa services.
We will guide you through the process of settling your KCB MPesa loan, obtaining CRB clearance, and restoring your credit score.
The ultimate goal is not just to avoid CRB listing but also to restore your creditworthiness and maintain a debt-free status.
Table of contents
What Happens If I Don’t Pay My KCB MPESA Loan in Time?
Typically, KCB MPESA loans have a 30-day repayment period with an interest rate of 7.5%.
If the loan and interest are not paid within this period, KCB MPESA offers an additional 30-day extension, albeit at a higher interest rate.
After the initial 30 days, the lender will start sending frequent reminders about the overdue loan.
Should the loan remain unpaid after 60 days, the lender will proceed to report your name to the CRB for a kcb mpesa loan defaulters consequences on the 90th day.
Can KCB MPESA List You On CRB?
As mentioned, KCB M-PESA may submit your name to the CRB for a negative listing.
However, they provide sufficient time for you to attempt loan repayment before proceeding with this action.
Typically, it could take up to 90 days before your name is submitted to the Credit Reference Bureau.
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KCB MPESA Loan Defaulters Consequences
Being listed on the CRB has several serious repercussions, including:
- Negative credit rating: Being listed on the CRB adversely affects your credit score. When listed by the CRB, your rating plummets, which can have significant consequences for future loan applications.
- Future loan denials: A diminished credit score renders you unworthy of credit. Lenders like KCB MPESA may review your credit score and deny you a loan due to your tarnished credit reputation.
- Stringent future loans: Even though some lenders may provide loans without a CRB check, the terms of these loans are often strict. You might face higher interest rates, shorter repayment periods, and the requirement to provide collateral for the loan.
- Missed job opportunities: Many employers, particularly in the Public Service, demand CRB clearance when considering job applications. If you default on a KCB MPESA loan and are listed on the CRB, obtaining clearance becomes challenging.
- Missed promotions and career advancements: Negative CRB listings can cost not only job opportunities but also promotions and career progressions. Employers often consult Section 20, Parts 3 & 4 of the Public Officer Act, which emphasizes the need for integrity among public servants, making a negative CRB listing a ground for automatic disqualification.
- Prolonged record archiving: Clearing a KCB MPESA loan post-CRB listing does not instantly remove your name from public records. Your information can remain publicly accessible for up to five years, which is undesirable.
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How Long Does KCB MPESA loan CRB listing Last?
The duration for a CRB listing can vary based on the listing reason and the speed at which you settle the outstanding loan. Sometimes can persist for up to 12 months.
However, if you promptly repay the loan and work towards restoring your credit history, the negative listing might be short-lived.
It’s important to remember that even after clearing the CRB listing, your records remain in public archives for up to five years, as previously mentioned.
Therefore, while you may no longer be listed, your public record isn’t immediately cleared and may require some time.
What Should I Do After KCB MPESA Loan CRB listing?
Being delisted from a KCB MPESA loan is not the end. You can reclaim your tarnished credit reputation and restore your creditworthiness.
This is achievable through three specific steps:
Step 1 – Clear the existing loan
To clear your CRB record, you must first settle any outstanding debts. Here’s the process to repay your KCB MPESA loan:
- Navigate to the MPESA menu on your phone.
- Select ‘Loans & Savings’, then ‘KCB MPESA’.
- Choose ‘Pay Loan’.
- Decide whether to pay from your MPESA or from your KCB MPESA savings.
- Enter the payment amount and proceed as instructed.
Alternatively, you can repay your KCB MPESA loan via the pay bill method:
- Access MPESA on your phone, then select ‘Lipa Na MPESA’.
- Opt for ‘Pay Bill’ and input the Business Number 522 559.
- Use the borrower’s ID as the account number.
- Enter the amount you wish to pay and follow the prompts to complete the transaction.
Step 2 – Obtain CRB Clearance
Having settled your existing KCB MPESA loan, you are now eligible to seek clearance from the Credit Reference Bureau. KCB MPESA primarily reports to Metropol and TransUnion.
1. Metropol
To register with Metropol, visit their website, use the Crystobol mobile app, or dial the USSD code *433#.
A registration fee of Ksh 50 is payable to pay bill number 210 384. Enter your ID number as the account number to receive a reference number, PIN, and a unique link.
Metropol charges Ksh 250 to find out who has blacklisted you, which might be superfluous if it turns out to be KCB MPESA.
Additionally, a CRB clearance certificate can be obtained for Ksh 2200.
2. TransUnion CRB
To register for a TransUnion account, send your name and ID to 21272 and select Credit Status (CS).
The CRB Credit Report costs Ksh 650, and the clearance certificate is Ksh 2,200.
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Step 3 – Rebuild your credit reputation
Having obtained clearance from the CRB, the time has come to restore your former esteem.
You must rehabilitate your damaged credit reputation, which involves following these tips, among others:
- Rebuilding Trust with KCB MPESA: It’s advisable to start saving with KCB MPESA to regain their trust. Consistently saving increases your credit score over time, eventually making you eligible for loans once more.
- Frequent Use of MPESA Services: Regularly engaging with MPESA services can help mend a tarnished credit history, as KCB MPESA keeps track of your MPESA transactions.
- Securing and Repaying Small Loans: Upon requalification for loans, opt for the minimal amounts and repay them promptly. This isn’t an endorsement of debt; rather, it’s a tactic to restore your credit standing.
What to Do in Case of a KCB MPESA Loan Declined Due to Late Payment
If KCB MPESA loan denies you a loan due to late repayment, consider taking these steps:
1. Contact the lender
Understanding the lender’s reasons for not granting a loan is crucial.
It may be due to late repayments, but other factors like CRB listing could also be at play.
Therefore, it’s important to contact them for clarification.
Below are the contact details for KCB MPESA loans:
- Call: 0711 087 087 or 0732 187 000
- WhatsApp: 0711 087 087
- Website Live Chat: Visit Safaricom.co.ke or KCBgroup.com
2. Get CRB clearance certificate if listed
One likely reason a lender may deny your loan application is due to CRB listing.
If this is the case, make sure to settle the loan completely and follow the advice I provided to secure clearance from the CRB.
What to Do to Avoid KCB MPESA CRB listing charges
Considering the consequences of a negative listing, being on the CRB list is undesirable.
It’s best to avoid this situation, which requires taking certain steps:
1. Pay an existing loan
Prior to KCB M-PESA submitting your name to the CRB for a negative listing, they typically issue multiple reminders and provide a grace period of up to 90 days for payment.
It is advisable to utilize this period to settle your dues and prevent being negatively listed with the CRB.
2. Get CRB clearance
If your name appears on the CRB’s watch list, it’s advisable to take steps to remove it.
This involves settling any debts with the lender and securing a CRB clearance certificate.
3. Offer collateral
Should you need to borrow, think about providing collateral. In case of non-payment, the lender can claim the collateral, which prevents your name from being reported to the Credit Reference Bureau, thus preserving your credit standing.
Also read – How to Use the African Bank Loan Calculator
4. Save up
The most effective strategy to prevent borrowing is to master the art of saving money.
With a sufficient amount saved and an emergency fund in place, you’ll no longer need to rely on borrowing from KCB MPESA or any other digital lending services.
5. Create an extra income source
If your earnings are inadequate and saving proves challenging, it may be wise to seek an additional source of income.
Exploring offline side hustles or online opportunities can provide supplementary income, potentially reducing dependence on emergency mobile loans.
FAQs
A KCB Mpesa Loan is a microloan service provided by KCB Bank in partnership with Safaricom, allowing M-Pesa users to access short-term loans via their mobile phones.
To be eligible, you must be an M-Pesa user, have an active Safaricom line registered for at least six months, and maintain a good M-Pesa transaction history.
You can apply for a KCB Mpesa Loan through the M-Pesa menu by selecting Loans and Savings, then KCB Mpesa, and following the prompts to request a loan.
The loan amount ranges from Ksh 50 to Ksh 1,000,000, depending on your credit limit and transaction history.
The interest rate for KCB Mpesa Loans is 7.5% for a one-month loan.
The repayment period for KCB Mpesa Loans is typically 30 days from the date of disbursement.
If you fail to repay your loan on time, you may incur additional penalties, and your credit rating with KCB and Safaricom will be negatively affected.
Yes, you can repay your KCB Mpesa Loan early through the M-Pesa menu by selecting Loans and Savings, then KCB Mpesa, and choosing the repayment option.
Your credit limit is determined based on your M-Pesa transaction history, usage patterns, and previous loan repayment behavior.
Conclusion
We’ve shared what you ought to do with a KCB MPESA loan after CRB listing.
In summary, you should repay the loan, get out of CRB, and rebuild your stained credit reputation.
References
KCB M-PESA Loan – Grow Your Money
FREQUENTLY ASKED QUESTIONS – KCB Bank Kenya Limited
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