Non Performing Loans Kenya: Thousands of Kenyans are set to be listed on CRB over mounting loan defaults. By October this year, Kenyans had defaulted on bank loans worth Sh. 404 billion. This meant that the amount of defaults had risen from Sh. 349.9 billion at the end February. It also means that since Kenya declared her first case of coronavirus on March 12 this year, Kenyans had defaulted on bank loans worth Sh. 53.95 billion.
“Non performing loans (NPLs) increases were noted in the transport and communication, energy and water, tourism, restaurants and hotels and real estate sectors, mainly due to disruptions of the businesses. The increases in NPLs were partially offset by repayments and recoveries in the trade, manufacturing, building and construction sectors,” said Central Bank of Kenya (CBK) Governor Patrick Njoroge.
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The number of Kenyans listed on credit reference bureaus hit 3.2 million in April this year. This was a jump from the 2.7 million Kenyans who were listed in the CRB last year. The listing in the CRB represented a 12 per cent rise in non-performing loans in Kenya up from 9.5 per cent.
According to data from the Central Bank of Kenya (CBK), most of these defaults have been fueled by mobile digital borrowing and defaults. Of the 2.7 million who were listed in the CRB in 2017, more than 400,000 people had been blacklisted for defaulting on loans of Sh. 200 and below. 16.6 per cent of digital borrowers took up one loan to pay another, ensnaring them in a vicious cycle.