Uhuru’s CRB Directive: What it Means for Your Loans

President Uhuru Kenyatta during Mashujaa Day celebrations at Wang’uru Stadium in Mwea, Kirinyaga County announced various government interventions aimed at accelerating economic growth in the wake of the pandemic.

As part of the third stimulus package since the onset of the pandemic, the President ordered a 12-month suspension of listing borrowers with Credit Reference Bureaus (CRBs) for loans less than Ksh5 million.

The suspension of CRB listing applies to loans that were defaulted from October 2020, when the last moratorium on listing was lifted. It will be in place until September 2022.

It means that for loans less than Ksh5 million, banks and other financial institutions will be unable to report negative credit information to the three registered CRBs in Kenya – Metropol, Transunion Kenya and CreditInfo.

The interventions are also meant to improve access to credit and to cushion businesses reeling from the shocks of Covid-19. Being listed on CRBs limits the ability of borrowers to access more credit.

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“The relevant authorities will, for loans less than Sh5 million, effect a moratorium of listing in CRBs for a period of 12 months to end September 2022,” Uhuru declared.

It is the second time since March 2020 that the government has announced CRB listing relief as part of its response to the pandemic.

The first, a six-month moratorium, was announced in April last year soon after the first cases of Covid-19 was reported and various restrictions introduced.  It ended in September last year, after which lenders offered defaulters 90 days from October 1 to repay their loans or be listed with CRBs.

The number of blacklisted loan accounts on CRBs jumped 45% in five months after the moratorium was lifted – from 9,673,258 in August 2020 to over 14 million in January.

Many who have suffered losses of income during the pandemic, due to factors such as job losses, redundancies, business closures and pay cuts have been unable to keep up with loan repayments.

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