Are you a defaulter in Kenya? If yes, you’re probably worried about being listed on Credit Reference Bureaus.
But here’s the good news: On November 14, 2022, the Central Bank of Kenya directed all mortgage institutions, banks, and microfinance institutions to delist all mobile-based loan defaulters.
However, this suspension will only be for six months. The mobile loan defaulters are cleared from CRB until May 31, 2023.
The suspension applies to all borrowers with less than ksh.5M loan who defaulted from October 31, 2022.
This means that if your loan performed well before October, then became non-performing after, your name is not on the negative CRB listing until the end of May 2023.
This directive is one of the government’s efforts to rescue over 4.2 million Kenyans listed on CRB.
Expectations from Defaulters
All borrowers are expected to agree on the repayment plan with their lenders.
After May 31, 2023, defaulters who will not honor their word with their financial institutions will again appear on the negative CRB listing.
According to the CBK directive, the lending institutions will give their defaulters a 50% discount when repaying their loans.
If you are listed in CRB for defaulting Ksh.10, 000, your lender will give you a discount of 50%. This means you’ll pay Ksh.5,000, repayable on or before May 31, 2023.
Once the grace period expires, your financial institution will consider your repayment performance for those six months to know whether to re-list your name on CRB or give you more time to repay your loan.
Terms and Conditions
The suspension terms only apply to borrowers whose loans became non-performing before October 31.
Additionally, the delisting is only for mobile-based loan defaulters, not Kenyans who take credit from digital lenders through mobile applications. Also, the grace period is only for loans with 30 days of maturity.
If you clear your loan on or before May 31, CRB will delist your name from the record of defaulters. Therefore, your credit score will improve, and you’ll not appear in CRB default history.
This directive is one of the various economic recovery plans by President William Ruto. His administration has promised to prioritize financial inclusiveness for all Kenyans.
To learn more about CRB listings, check out the following posts: