Credit Reference Bureu (CRB) listing of loan defaulters is set to resume after the six month grace period expires on Wednesday the 30th of September 2020.
If the Central bank of Kenya (CBK) fails to issue a directive prolonging the grace period, then loan defaulters will be blacklisted in CRB once again.
The CBK, through a press release on the 8th of April 2020, announced the grace period as part of the measures to cushion citizens for negative economic effects of the Covid-19 pandemic.
“On the recommendation of CBK, (Treasury CS Ukur Yattani) published the suspension for a period of six months, the listing of negative credit information for borrowers whose loans were performing previously but have become non-performing from the 1st of April, 2020.”
“Consequently, loans that fall in arrears from the 1st of April to the 30th of September, 2020, will not lead to the “blacklisting” of the borrower on the CRBs,” the statement read in part.
Financial firms will now be free to submit defaulters to the CRB from Wednesday after the grace period elapses.
Jared Getanga, CEO Credit Information Sharing Association of Kenya, confirmed that the CBK has not commented on the matter. He further admitted that CRB listing can’t proceed without CBK’s guidance.
Before the grace period, loan defaulter numbers in Kenya were increasing with data showing an increase from 2.7 million in 2019 to 3.2 currently.
This anticipation follows president Uhuru announcing the end of tax relief measures. The first to fall in January 2021 will be an income tax on both individuals (PAYE) and companies.
However, the president instructed the treasury to continue giving people earning below ksh 25,000 100% tax relief.
“To continue cushioning low-income earners, I direct the National Treasury to consider maintaining the 100 percent tax relief on persons earning a gross monthly income of up to Ksh.24,000 beyond the sunset date of the 31st of December, 2020,” Uhuru directed.