Borrowers get reprieve for one year in new Uhuru’s suspended CRB listing plan

Kenyans who took loans in the period starting October 2020 but failed to repay them on time, leading them to be listed in credit reference bureaus have received a reprieve from the president. Kenya’s president Uhuru Kenyatta gave the orders to suspend listing of defaulters for a period of one year during this year’s Mashujaa day celebrations. The move is meant to give more time to small business who are still healing from severe effects of covid-19.

The president announced that, CRB’s will drop defaulters listed during this period until September 2022, this is aimed at enabling them recover from effects of covid-19 without facing the effects associated with being listed in the bureaus. Suspending listing from CRB’s is part of a stimulus package announced by the president to give relief to affected businesses as well as families in the country. During the peak of Covid-19 in 2020, most companies were forced to lay-off staff to cut back on their operational costs while families sort for short term loans to meet their obligations.

And while Kenyans sort for these loans which saw mobile loan facilities increase in popularity, in most cases they were not able to repay them owing to the duration covid-19 has taken thus far. This in turn meant they’ll be listed in credit reference bureaus denying them opportunities to take future loans.

Financial institutions had been allowed to continue listing Kenyans, after the worst of Covid had passed, and the current orders will be the second that the President had enforced to cushion Kenyans from the effects of negative CRB listing.

Working Kenyans who had sort short term loans such as salary advances to purchase household items such as electronics and furniture, have since struggled to repay after most companies slashed their salaries. Accounts listed with CRB skyrocketed to 14 million in January this year, revealing the struggles Kenyans were having with repaying their loans.

The ratio of non-performing loans to total loans in the banking sector stood at 14 percent in June, down from 14.6 percent at the end of March, highlighting the economic recovery for households and businesses.


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