EXPIRY

CBK lifts suspension on loan defaulters listing

The six-month suspension of listing ended on September 30, 2020

In Summary
  • 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
The new look Kenyan currency notes.
The new look Kenyan currency notes.
Image: ENOS TECHE

Loan defaulters will no longer be cushioned from being listed by the Credit Reference Bureau as the temporary suspension of the listing has expired.

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 will apply.

“Specifically, financial institutions will from October 1, 2020, assess the performance of all loans that were performing before April 1,” Central Bank of Kenya said.

 

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 regularised 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 regularise their loans before they are listed with CRBs.

On April 14, 2020, 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.

This was aimed at giving a reprieve  to borrowers affected by the impact of the Covid-19 pandemic.

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