Safaricom, NCBA bank and other partners have agreed to back the government’s plan to delist Kenyans who are negatively listed on Credit Reference Bureau (CRB) for defaulting on loans.
Safaricom at a press conference attended by President William Ruto said it is committed “to support government efforts concerning Kenyans who are negatively listed in Credit Reference Bureaus.”
Working closely with its partners, government agencies and other stakeholders, the company hopes to craft a mechanism that will help customers who have defaulted on M-Shwari and Fuliza enlist for a credit repair scheme. Details of how this scheme will work are yet to be shared.
“This will result in the delisting of over four million digital loan defaulters who are negatively listed on CRBs and restore their ability to access formal regulated credit.”
On several occasions, President William Ruto has pinpointed the high-cost of accessing credit facilities as an impediment to the growth of MSMEs in the country. During his inauguration, the President said his government would work with players in this space to reshape credit offering and expand it to enable more Kenyans to take up loans responsibly.
At the press briefing on Wednesday, the president said, “I am very happy that between four to five million Kenyans will be opted out of the CRB blacklist by the beginning of November. These Kenyans have been excluded from any formal borrowing and have been left at the mercy of shylocks and predatory lenders,”
The president has charged his cabinet nominee for treasury Prof. Njuguna Ndung’u and his ICT counterpart Eliud Owalo with the responsibility to create a new model for CRB listing.
“We should change the model of listing so that we do not make an all-or-nothing process, and unfairly disadvantage borrowers,” he said.
President Ruto further expressed his support for CRB as “a mechanism of instilling financial discipline in our financial sector,” he said.
The president has clearly stirred still waters within the credit sector. It remains to be seen how the market responds to the short-term actions as Kenyans await long-term policy changes to address most of the issues raised.
Safaricom says that although Fuliza was initially meant to be a short-credit facility, it has evolved rapidly over time, with customers retaining the debt for 14-19 days.
”This is what we intend to address with this.” Safaricom said in a statement, “Additionally, we wish to express our intention to work with our partners and other industry stakeholders to rethink the credit information-sharing framework that underpins CRB to better enable Kenyans, especially the Kenyan entrepreneur to access credit more seamlessly.”