CRB listings return as the State sanctioned suspension ends

Commercial banks and other lending institutions are set to resume listing loan defaulters effective Thursday with Credit Reference Bureaus (CRB) as the moratorium on listing ends.

Speaking earlier on Wednesday, Central Bank of Kenya (CBK) Governor Patrick Njoroge ruled out a further extension to the moratorium introduced in March as part of measures to cushion borrowers from adverse economic effects of the pandemic.

The end of the moratorium is expected to see more Kenyans listed on the dreaded CRBs are the rate of loan defaulting continues to soar.

The CBK has challenged borrowers in distress to move in earnest to resolve their loan payments including updating redemptions or seeking out reprieve as the window given to banks to restructure loans remains open to March 2021.

“From October 1, the banks will begin looking at borrowers and accessing how they are doing on payments. If you have not paid your loans, you have about three months to regularize your payments,” Dr. Njoroge said.

According to data collected from Kenya’s three official credit reference, 3.2 million Kenyans were listed as loan defaulters at the end of 2019 in comparison to 2.7 million in 2018.

Listed loan-defaulters are however bound to increase after the banking sector ratio of gross non-performing loans (NPLs) hit a high of 13.6 per cent in August or an equivalent Ksh.354 billion.

The rise in NPLs is against the opened window to restructure loans which has seen commercial banks give payment holidays and extend loan tenures amounting to Ksh.1.12 trillion as of the end of August representing an equivalent 38 per cent of the sector’s Ksh.2.9 trillion loan book.

Unregulated digital lenders who include applications such as Tala and Branch will however not be eligible to listing defaulters following their expulsion from the credit information sharing system CIS in April this year.