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Kenya: No Listing of Businesses on CRBS for a Year, Orders Kenyatta

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4 years ago

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Millions of Kenyan businesses have been handed a relief after the government announced suspension of their listing with Credit Reference Bureaus (CRBs) for loan defaults, a year after it gave lenders the greenlight for their listing.

President Uhuru Kenyatta, in his speech during the Mashujaa Day fete on Wednesday, ordered a freeze on listing on CRBs until September next year. The directive applies for businesses with loans of Sh5 million or less.

This means that for businesses that have been dutifully repaying their loans according to attendant loan terms over the past year, they will no longer be listed with CRBs for the next one year should they fail to repay on schedule.

The government in April last year suspended listing on CRBs for six months, which applied for borrowers who had been properly repaying their loans before that time but who would default in the period after the directive. It came at a time when the Covid-19 pandemic disrupted business cash flows.

But this order expired in September, paving way for lenders to resume issuing negative credit reviews to borrowers who were not servicing their loans.

But in his speech today, President Kenyatta, said Micro, Small and Medium-sized Enterprises (MSMEs) are still struggling due to prolonged effects of the pandemic.

Further, he ordered that businesses which were listed with CRBs from October last year for defaulting be expunged from these credit rating agencies for the next one year to give them clean bill of health for borrowing.