Central Bank to the rescue of 4.2 million Kenyans blacklisted by CRB
The Central Bank of Kenya has announced the rollout a Credit Repair Framework that has been initiated by banks, microfinance banks, and mortgage finance companies targeting Kenyans who have been “blacklisted” by the Credit Reference Bureau (CRB).
The CBK said that the framework seeks to improve the credit standing of mobile phone digital borrowers whose loans are non-performing and reported as CRB.
The financial institutions expect the framework to enable more than 4.2 million mobile phone digital phone borrowers under CRB to access the loans.
The framework will cover loans with a repayment period of 30 days or less offered by the same institutions through mobile phones.
Also, through the framework, the institutions will provide a discount of at least 50 per cent of non-performing mobile phone digital loans as at the end of last month.
“The institutions will then enter into a repayment plan with borrowers for a period up to May 31, 2023, for the balance of the loan. Upon expiry of the Framework, the credit standing of the borrowers with respect to those loans will depend on the repayment performance during the six-month period,” CBK said.
The plan is expected to enable personal and micro enterprises sectors affected by Covid-19 pandemic to access credit and other financial services as they rebuild their lives and livelihoods.
This comes after President William Ruto’s promise to have those listed under CRB cleared by November 1, failed to materialise.
“I’m very happy that between 4 to 5 million Kenyans will by the beginning of November be out of the CRB blacklist…this is very important because these Kenyans have been excluded from any formal borrowing and have been left at the mercies of shylocks who exploit them,” President Ruto said when he proposed for a gradual method to enable those blacklisted to have access to loans.
According to Metropol, which is licensed by CBK to provide CRB Services to all banks in the country, a total of 19 million Kenyans have been listed.