Follow us on Telegram for the latest Tech news and reviews

 

News

CRB listing system to be reviewed to ease access loans says President William Ruto

William Ruto

At his inauguration yesterday, President William Ruto promised to review the Credit Reference Bureau (CRB) listing system in a move that aims to ease access to credit. With a reviewed CRB listing system, the new administration hopes to lower the cost of accessing loans for small and micro businesses. 

According to President William Ruto, these reforms will help gradually move away from the negative listing of loan defaulters. 

President Ruto said the current CRB framework is arbitrary and punitive and this locks out many borrowers from accessing credit facilities. 

In his speech, President Ruto said, “Our starting point is to shift the credit reference bureau (CRB) framework from its current practice of arbitrary, punitive and all-or-nothing blacklisting of borrowers, which denies borrowers credit.”

He went ahead to say, “We will work with credit reference bureaus on a new system of credit score rating that provides borrowers with an opportunity to manage their creditworthiness. This will eliminate the culture of blacklisting”

President Ruto did not clearly state how his government is planning to achieve this. It is also not clear how reviewing of the CRB listing will affect access to credit. Some lenders may shy away from lending as they may see the risks as being too high. I hope this will not be the case and that reviewing the CRB system will not cause any major effects. 

This speech by President Ruto comes a few days to the end of the suspension of negative listing of defaulters of up to Ksh 5 million. The suspension was to give borrowers a relief as a result of the COVID 9 pandemic that affected the economy and access to credit. The relief period ends on September 30. 

According to data from the CRB, about a third of Kenyans loan accounts are negatively listed. This is attributed to the struggling economy as the country dealt with the Covid 19 pandemic. Most of the new listings are for mobile digital loans even as the government froze the blacklisting of defaulted loans that are below Ksh 1,000. 

“Financial inclusion and access to credit are critical in addressing the fundamental factors of the cost of living, job creation and people’s well-being,” President Ruto. “We shall take measures to drive down the cost of credit.”

Read: UDA’s Promises for the Tech and digital economy in Kenya

source

About author

Editor at TechArena. I cover all things technology and review new gadgets as I get them. You can reach me on email: kaluka@techarena.co.ke
Related posts
News

M-Pesa services set to launch in Ethiopia

News

Branch, Zenka, Tala and other digital lenders investigated for resorting to debt shaming tactics to recover loans

News

Safaricom Ethiopia has officially been launched

FeaturesNews

Here are phones can get using Bonga Points in the Safaricom ‘Jisort Na Bonga Phone promotion'

Sign up for our Newsletter and
stay informed

Leave a Reply

Your email address will not be published.