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State saves 1.3m borrowers from loan defaulters listing
A soft economy has triggered job losses and cash flow crunch in firms, which, together with high lending rates, have caused hardship for borrowers in Kenya’s banking industry and increased loan defaults.
Lenders have removed more than half of personal loan accounts from negative listing in the past five years to December 2023 on the back of key State interventions, including partial debt cancellation and outlawing listing of small ticket loans.
Latest data from Creditinfo, one of the three licensed credit reference bureaus (CRB) in Kenya shows new individual negative listings—a tag given to loans reported to CRBs for being in default—fell by 1.27 million accounts to a new low of 933,551 at the end of last year from 2.2 million in 2019, translating to a 57.7 percent reduction. The negative listings declined by 203,098 last year alone compared to 1.13 million booked in 2022.
