Kenyans Blacklisted On CRB Now Hit 14 Million

Since August 2020, five million more Kenyans have been blacklisted on the Credit Reference Bureau (CRB). The number of loan accounts negatively listed has hit 14 million, as Kenyans continue to struggle with repayments.

According to data by Metropol, CRB revealed that 14,035,718 Kenyans had been negatively listed by January 2021, a major increase from 9,673,258 in August 2020.

The blacklisted accounts jumped by a significant 45 percent in the five months between August and January after the Central Bank of Kenya (CBK) lifted a three-month moratorium.

“Obviously people are struggling with repayment even those who had restructured their loans. This is a temporary situation and I believe as the economy starts to pick up and cash flow improves people will begin to pay,” Metropol managing director Sam Omukoko said.

The banking regulator had given a six-month suspension of CRB listings in April as part of the measures to cushion borrowers hit by the coronavirus pandemic.

Defaulters with loans that were performing before April 1, 2020, but went into arrears were asked to regularise loans by the end of December 2020.

Banks were asked to notify defaulters before listing them with CRB for loans owing arrears after December 2020.

The huge rise in negative listings was driven by mobile loans following a proliferation of digital lenders targeting the banked and the unbanked alike, saddling borrowers with high-interest rates and leaving regulators scrambling to keep up.

Earlier in 2020, the Central Bank of Kenya (CBK) banned hundreds of mobile loan app companies from listing defaulters with CRB.

More than 337 unregulated digital mobile lenders and micro financiers were banned as part of the CBK’s efforts to reform the emerging digital lending market.

The sharp rise in new listings underlies the crisis in the banking sector which are struggling with mounting unpaid loans whose share has grown to the highest level since August 2007 as a result of economic difficulties during the coronavirus pandemic.

The economy has taken a hit from the Corona pandemic with the Kenya National Bureau of Statistics (KNBS) showing that 1.72 million workers had lost their jobs in three months to June 2020

According to the Central Bank of Kenya,  earlier revealed that borrowers had defaulted on Ksh73.05 Billion bank loans in 10 months to December.

The 71.26 shillings billion spikes in defaults between the end of February and December is a stark contrast to an additional Sh5.4 billion that fell into default status in a similar period in 2019 and Sh31.1billion in 2018.

Dr. Njoroge said that credit risk remains elevated and that is expected given where the economy is.

He added that they have done some analyses and assuming that the economy remains flat and the benefits of reopening the economy do not come through, NPLs will rise to 16 or 17 percent of gross loans.