President William Ruto has announced that 4 million Kenyans blacklisted for defaulting loans will be ejected from the negative listing by November 1.
Speaking at a joint press briefing held by Safaricom, KCB and NCBA Bank, Dr Ruto said that his government is not against credit reference bureaus (CRBs), adding that they are “just changing the model”.
President Ruto said lowering the cost of credit is part of multiple interventions to lower cost of living.
“Instead of blacklisting we can have a graduated listing of borrowers based on how they have borrowed and how they have paid back,” he said.
“This is a positive development for millions of Kenyans who are excluded from accessing credit. We have the largest opportunity in enabling credit access to MSMEs.”
The announcement by the Head of State comes the same day Safaricom, KCB and NCBA announced that Fuliza charges would be slashed by up to 40 percent, as well as introducing a three-day grace period where no maintenance fees will be charged.
The upper band of between Sh2500 to Sh70,000 have been handed a 16.7 percent price cut from Sh30 daily to Sh25.
Fuliza overdraft facility was launched on January 5, 2019, in partnership with Commercial Bank of Africa (now merged into NCBA) and KCB Group.
The small credit facility has emerged as a leading mobile loan, disbursing Sh1.5 billion daily.
Borrowings from Safaricom’s overdraft service rose by 30.7 percent in the six months to June this year to Sh288 billion up from Sh220.38 billion in the same period last year.
The product may however be facing potential competition from a new zero-interest credit service dubbed Faraja.
The new product that would allow millions of its customers to shop for goods up to Sh100,000 and pay later will be offered by Safaricom, EDOMx-a Kenya-based financial technology firm and Equity Bank.
