Borrowers defaulting on loans of less than KSh5 million will not be blacklisted at the credit reference bureaus (CRBs) the Central Bank of Kenya (CBK) announced Monday.
This is part of President Uhuru Kenyatta’s stimulus package announced to provide relief to struggling Micro, Small, and Medium Enterprises (MSMEs).
The moratorium applies to loans below Ksh.5 million that fall in arrears from October 1, 2021, to September 30, 2020.
The regulator further said during the period, CRBs will not include in any credit report, any negative credit information for loans of a customer less than Ksh.5 million submitted to the CRB from October 1, 2020, to September 30, 2021, for a period of 12 months from October 1, 2021, to September 30, 2022.
“The suspension is therefore targeted to rope in the MSMEs and for a specified duration that will provide space to turn around their businesses. Accordingly, CBK recommended a threshold of a loan amount of Ksh.5 million and below, that will capture the targeted MSMEs. Further, a period of one year for the suspension is a reasonable period for the MSMEs to restore their businesses,” the CBK said.
The suspension is the second since Kenya reported the first case of the coronavirus in 2020.
