Kenyans with loan defaults under Ksh.5 million to be spared from CRB listing
Kenyans who have defaulted on loans below Ksh.5 million will be spared from being listed with Credit Reference Bureaus (CRBs) for one year to September 30, 2022.
This is after President Uhuru Kenyatta directed the National Treasury in consultation with other stakeholders to suspend listings with the economy yet to fully re-emerge from the pandemic.
“Some of the micro, small and medium enterprises (MSMEs) have struggled to get back to a sound footing following the adverse effects of the pandemic,” said President Kenyatta.
At the same-time borrowers of loans below Ksh.5 million already listed with CRBs form October 2020 to date will not have the listing incorporated in credit reports for the next 12 months to September 30 next year.
According to President Kenyatta, the measures are geared at supporting credit disbursement to the private sector as the government steps on the throttle to aid a full-circle economic recovery.
Meanwhile, President Kenyatta has asked banks to accommodate new loan restructures to cushion distressed borrowers.
“I also urge banks and financial institutions to accommodate customers who seek to restructure their banking facilities,” he said.
The government had suspended all new CRB listing between April and October last year while the Central Bank of Kenya (CBK) had directed banks to offer loan moratoriums to customers across a 12-month period beginning March 2020.
During the window, banks restructured a total of Ksh.1.7 trillion restructuring representing an estimated 57 per cent of their loan books.
The number of loan defaulters listed with CRBs hit a high 14 million at the beginning of this year indicating increased distress by Kenyans.
Even so, banking sector non-performing loans (NPLs) have improved to 13.9 per cent as at August 2021 pointing to the regularization of loan payments by borrowers in recent months.