The central bank of Kenya has announced the suspension of negative credit listing for borrowers of Kshs. 5 million and below for the next 12 months.
A statement by CBK indicated that the directive took effect on October 1 2021 and would run through September 30, 2022.
President Uhuru Kenyatta had on Mashujaa day made a statement regarding the same, stating that the move was aimed at revamping the nations economy that was shattered by the global pandemic.
“The agency announces the suspension for a period of twelve months of the negative listing credit information for borrowers with loans below Ksh 5 million whose loans were previously performing but have become non-performing from October 1 2021.
Further, CRBs will not include in any credit report, any negative credit information for loans of a customer less than Ksh 5 million submitted to the CRB from October 1, 2020 to September 30 2021,” the statement reads in part.
Over 14 million Kenyans have been blacklisted on credit reference bureau, barring them form accessing loans at a time when the Covid 19 pandemic was ravaging the country.
However, the agency has cautioned Kenyans who intend to take up loans below Ksh. 5 million stating that the directive will cause challenges during credit application.
“In this regard, the credit could adversely impact the provision of credit by banks to the target group, as they will be unable to distinguish between the good and bad borrowers during the suspension period,” reads the statement.