CBK Suspends Listing Of Borrowers On CRB. What You Should Know

NAIROBI,Kenya, Nov, 8 – The Central Bank of Kenya (CBK)  has announced the suspension for a period of 12 months of the listing of negative credit information for borrowers with loans below Sh5 million whose loans were performing previously but have become non-performing from October,1,2021.

The CBK in a statement revealed that loans below Sh5 million that falls in areas from October 1,2021 to September 30,2021, will not lead to ‘black-listing’ of the borrowers on the credit Reference Bureau (CRB).

“Further CRBs will not include in any credit report, any negative credit information for loans of a customer less than Sh 5 million.” read a section of the statement.

During this year’s Mashujaa Day celebration, president Uhuru Kenyatta announced a raft of measures, that are targeted towards cushioning the people from the economic meltdown occasioned by the COVID-19 pandemic.

Of the measures announced by the President during his Mashujaa Day celebrations speech in Kirinyaga County on Wednesday, is the cushioning of borrowers from being listed in the Credit Reference Bureaus (CRBs).

“In addition to foregoing measures and to accelerate our economic recovery, I urge all banks to accommodate customers who seek to restructure their banking facilities.” said president Kenyatta.

Over the last decade,Kenya has developed a robust Credit Information Sharing (CIS) mechanism for the banking sector which has facilitated the development of a credit history for Kenyans to enable them access cheaper credit.

This is said to best suit this that do not have collateral such has title deeds that have traditionally been used to secure credit.

“In making its recommendation for the suspension to September,30,2022, CBK was cognisant of the need to balance between providing between relief to MSMEs, while safeguarding the effectiveness and sustainability of the CIS framework, ” said CBK in a statment.

The CIS mechanism aims to bridge the information gap about borrowers’ creditworthiness by considering the borrowers’ credit history and allowing credit to be priced accordingly.

The suspension is expected to rope in the MSMEs and for a specified duration provide space to turn around their business.