Businesses & Financial News

Central bank announces resumption of CRB Listing for Loan Defaulters

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The Central Bank of Kenya (CBK) announced the suspension, for a period of six months, of the listing of negative credit information with credit reference bureaus (CRBs) for borrowers whose loans were performing previously and had become non-performing after April 1, 2020.

The suspension did not apply to loans that were non-performing before April 1, for which the regular
procedures continued to apply.

The six-month suspension ended on September 30, 2020, following which the existing procedures for risk classification of loans with respect to their performance and subsequent listing with CRBs would apply.

Specifically, financial institutions will from October 1, 2020, assess the performance of all
loans that were performing before April 1.

For those loans that went into arrears after that date, the period for determining their performance begins on October 1, 2020. 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 regularized after the 30-day notice period, the financial institution will then list the non-performing loan with the CRBs.

Consequently, borrowers whose loans were performing before April 1 and subsequently went into arrears, will have three months (up to end December 2020) in accordance with existing procedures to regularize their loans before they are listed with CRBs.

As communicated before, borrowers are always required to fully service their loan obligations on a timely basis and engage their lenders in case of any concerns.

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