Kenya eases pain of loan defaulters, alters credit bureau rules
Saturday November 24 2012
Central Bank of Kenya's proposal that banks give notice of intentions to list a defaulter will help the banking fraternity side-step legal challenges. Graphic/Joy Abisagi Nation Media Group
Fresh regulations published last week are seeking to cut this period from seven to five years while also requiring banks to give bad borrowers a one month notice before listing them.
Kenyan banks have been accused of using negative reports as a threat to those falling behind their repayment schedules while declining loan applications of those listed, locking them out of credit access.
The changes are part of proposed guidelines released by the Central Bank for public review up to mid next month and they are aimed at responding to the challenges faced since the introduction of credit bureaus two years ago.