Hope for Loan Defaulters After Ruto's Takeover

  • President William Ruto reads his speech at Kasarani Stadium after being sworn-in as Kenya's fifth president on Tuesday, September 13, 2022
    President William Ruto reads his speech at Kasarani Stadium after being sworn-in as Kenya's fifth president on Tuesday, September 13, 2022
  • Kenyans who defaulted on their loans have a reason to smile after President William Ruto hinted at reviewing the listing of borrowers on the Credit Reference Bureau (CRB).

    In his inaugural speech, President Ruto explained how he will put measures to end the current practice of arbitrary and all nothing blacklisting of borrowers.

    “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. We shall take measures to drive down the cost of credit.

    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,” Ruto stated 

    President William Ruto signing official documents of Oath of Office as President of Kenya at Kasarani Stadium on September 13, 2022
    President William Ruto signing official documents of Oath of Office as President of Kenya at Kasarani Stadium on September 13, 2022
    PSCU

    The Head of State further said that his government will work with Credit Reference Bureaus - CRB, to end blacklisting of borrowers that has locked out millions of Kenyans from accessing credit facilities.

    “We will work with Credit Reference Bureaus, a new system of credit score rating that provides borrowers with an opportunity to manage their creditworthiness. This will eliminate blacklisting,” Ruto stated

    According to Data by Metropol, one of the three licensed CRBs alongside TransUnion and Creditinfo International, the number of loan accounts in arrears had jumped to 14,035,718 by January in  2020.

    Further records shows that 12 per cent of Kenyans listed on the bureau failed to pay their debts. This is despite efforts by former President Uhuru Kenyatta to suspend CRB listing for loans less than 5 million for a period of 12 months for loans that were defaulted during the pandemic.

    In his address to the Nation in October 2021 about the State of the Pandemic, the former President had issued an executive order directing that Kenyans listed on the bureau with less than sh 5milion will affect a moratorium of listing.

    .“The relevant authorities will, for loans less than Sh5 million, effect a moratorium of listing in CRBs for a period of 12 months to end September 2022,” President Kenyatta said

    However, President Ruto has already called the shots by issuing executive orders on how he wants his government to run. 

    He stated that traders have complained about the burden involved in making cash transactions exceeding Ksh 1 million making many of them to store  money under their mattresses. 

    “In our engagements, traders also complained about the onerous burden involved in cash transactions exceeding Kshs 1 million.

    Many have reverted to storing money under their mattresses at great risk, which is clearly not the intention of the anti-money laundering regulations,” Ruto questioned.

    Additionally, the new Commander-in-Chief said that his government will remain committed to mitigate the risk of cash transactions without compromising the security of the financial system

    “While we remain fully committed to mitigating this risk, we believe that there is scope to make compliance less burdensome on genuine business transactions. I have been assured by the Central Bank that work on how to ease this burden without compromising the security of the financial system is underway,” he stated

    The President also promised to revamp KRA and make it more professional, efficient, responsive and people-friendly, urging taxpayers to respond by undertaking their patriotic duty and pay taxes.

    President William Ruto reading his speech at Kasarani Stadium after being sworn-in as Kenya's fifth president on Tuesday, September 13, 2022
    President William Ruto reading his speech at Kasarani Stadium after being sworn-in as Kenya's fifth president on Tuesday, September 13, 2022
    Kenyans.co.ke