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CRB Listing To Resume In January As Thousands Default Over Ksh403 Billion In Loans

IMAGE/ COURTESY

Lenders will resume listing loan defaulters with Credit Reference Bureaus (CRBs) in January, following the expiry of grace period ordered by the government in March due to Covid-19.

Data from the Central Bank of Kenya (CBK) shows that non-performing loans (NPLs) rose to Ksh403.9 billion in October, up from Ksh349.9 billion at the end February.

Since March,  workers and businesses have defaulted on loans worth Ksh53.95 billion, according to CBK.

“NPL increases were noted in the transport and communication, energy and water, tourism, restaurants and hotels and real estate sectors, mainly due to disruptions of the businesses. The increases in NPLs were partially offset by repayments and recoveries in the trade, manufacturing, building and construction sectors,” said CBK Governor Patrick Njoroge.

Kenyans deferred payments of 46.5 percent of the bankers’ total loans or Ksh1.38 trillion, meaning the situation could have been worse if the loans were not restructured.

Read: 337 Digital Mobile Lenders Barred From Listing Borrowers With CRBs

The ratio of NPLs rose from 12.7 percent in February to 13.6 percent — the highest since August 2007 when it stood at 14.41 percent.

About 1.72 million workers lost jobs in three months to June when Kenya imposed coronavirus-induced lockdown that led to layoffs and pay cuts.

Over 3.2 million Kenyans were listed as loan defaulters with the CRBs before the outbreak of Covid-19 in March.

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Written by Francis Muli

Senior reporter at Kahawa Tungu, Muli has a passion for human interest stories. Believes in unearthing societal rots that have been hidden from the public eye.
Follow me on Twitter @FmuliKE. Email francis@kahawatungu.com

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