This archive report was first published on 4 January 2022.
As of March, lenders will only be allowed to report borrowers who default on loans exceeding Sh1,000 to the Credit Reference Bureau (CRB).
This change is part of the new Credit Reference Bureau Regulations 2021, which aim to shield millions of Kenyans from being listed on the CRB for defaulting on small loans.
According to the Central Bank of Kenya, the new rules are designed to protect borrowers from being blacklisted for defaulting on small loans, which can have severe consequences on their credit scores.
The bank warned that lenders who fail to comply with the new rules will face severe penalties, including the revocation of their licenses or heavy fines.
The new regulations are part of a broader effort to reform the credit reference system and ensure that lenders operate fairly and transparently.
According to the Central Bank of Kenya, the majority of borrowers who have been listed on the CRB for defaulting on loans have done so for amounts less than Sh1,000.
Between April and December 2020, the government temporarily suspended lenders from reporting borrowers who defaulted on small loans to the CRB as a measure to protect Kenyans from the economic impact of the COVID-19 pandemic.
In September last year, President Uhuru Kenyatta directed financial institutions to refrain from reporting borrowers who took loans of less than Sh5 million to the CRB for a year, until the economy recovered.
