The freeze of CRB listing is finally over. From Monday 4th January 2021, banks and other financial institutions will begin listing loan defaulters with Credit Reference Bureaus (CBRs) after the expiry of a three-month notice.
Banks and other lenders had offered bank defaulters a three-month notice to pay their loans following the Central Bank Of Kenya (CBK) lifting of a six-month freeze for the listing of defaulters.
The three-month grace period which began on October 1st, 2020, has finally elapsed. The CBK has placed a freeze on listing to caution Kenyans on the effects of COVID-19.
Kenya has three CRBs, Metropol, TransUnion, and Creditinfo International, and now lenders are now free to list your name there if you are a defaulter.
CRB Listing Suspension
The CBK had announced the suspension of CRB listing for loans that were defaulted after April 1, 2020, which was aimed at cushioning Kenyans from the economic fallout that came with Covid-19, which lasted for six months to September 30, 2020.
However, all lenders were advised to warn their customers for 90 days before listing them with the CRBs. Apparently, the three-month notice has elapsed.
Earlier, Patrick Njoroge, CBK said, “If a loan is in arrears after 60 days from October 1, a financial institution will, in accordance with the existing procedures, give the borrowers notice of the intention to list them with the CRBs.”
“If the loan has not been regularised after the 30-day notice period, the financial institution will then list the non-performing loan with the CRBs, ”he added.
Non-performing loans (NPLs) rose to Sh403.9 billion in October, up from Sh349.9 billion at the end of February. This was the highest eight-month increase in recent history. This is according to data from CBK.
This shows that defaulters have not paid loans amounting to Ksh. 53.95 billion from the period between March and November, when the country was on lockdown following the first case of Coronavirus in the country.
Now thousands of Kenya risk CRB listing in the New Year as most try to pull together their shattered life following the negative effects of Coronavirus.
The number of defaulters has jumped in the wake of COVID-19, which could mean that more people risk being listed as defaulters.
The CRB listing relief was part of a stimulus package announced on March 25, 2020, to cushion distressed businesses and households from the effects of the pandemic that slowed everything down world wide.
This comes even as the Treasury downgraded Kenya’s growth forecast for the year 2021 to 0.6 percent amid the economic fallout from the Covid-19 pandemic-making this the slowest expansion since 2008.