CBK roll out credit repair framework by financial companies
The Central Bank of Kenya has initiated a credit repair framework by financial institutions that will see close to 4.2 million digital money borrowers delisted by credit reference agencies.
Through a statement, CBK noted that through the framework, institutions would provide a discount of at least 50 percent of the non-performing mobile phone digital loans outstanding as at the end of October 2022 and will expire on May 31,2022.
According to CBK, the framework will cover loans with a repayment period of 30 days or less and were offered by these institutions through mobile phones.
“The framework will cover loans with a repayment period of 30 days or less and were offered by these institutions through mobile phones,” CBK said in a statement.
Upon expiry of the framework, the credit standing of the borrowers with respect to these loans will depend on their repayment performance during the six-month period.
The borrowers covered in the framework are mainly in the personal and microenterprises sectors and were adversely impacted by the COVID-19 pandemic and the effects of the pandemic continue to linger for the covered borrowers.
Additionally, the framework is expected to enable this particular segment of borrowers to access credit and other financial services as they rebuild their lives and livelihoods.
Further, CBK reminded Kenyans to honor their payment obligations on their credit facilities when they fall due, a move that will enable them build a good credit history based on their payment behavior and thereby obtain loans at better rates.
