This afternoon, Kenyan President, William Ruto, called for the restructuring of the current CRB profile listing mechanism. The President said the current system tends to lock out some borrowers, limiting access to credit for a big portion of the population.
With that, the President said that the over 4 million Kenyans blacklisted by CRBs will be ejected from the negative listing. This will be a relief for those listed on these systems for defaulting on their loans.
The President wants CRB to be transformed from just a blacklisting body to a credit scoring body. This is a much better platform as the current system can block access to credit. Access to credit is crucial in the growth of any economy. The President said, “Instead of blacklisting, we can have a graduated listing of borrowers based on how they have borrowed and how they have paid back.”
The exact ways the credit scoring system will work is still in the works but that is something we will know more about in the coming weeks.
President Ruto also clarified that his Government is not against CRB facilities. “We support CRBs as a mechanism of instilling financial discipline in our financial sector. We do not want credit listing to be all or nothing,” the President said in a press conference at a Nairobi hotel.
He went ahead to say CRB listing should not criminalize those unable to pay as has been the case especially with the rise of digital lenders offering services through a number of apps. Some of these digital lenders were recently approved by the CBK but most are still not. Most of the digital lenders have been known to employ crude ways to try and recover the money they lend to borrowers. This is also a major point that the President said needs to be addressed.
Fuliza rates lowered
Earlier at the same event, Safricom announced that it will lower Fuliza rates from next month. The move by the telco and its partners seems calculated as they probably knew the new government had plans to question their rates at some point. Either way, it is a win for the borrowers who will end up paying less.
This is a developing story and will be updated when we get more information.
Also Read: Safaricom to reduce Fuliza daily fees by up to 40% from October