The Central Bank of Kenya has rolled out an elaborate plan that aims to see 4.2 million Kenyans listed at the Credit Reference Bureau removed.
The plan targets digital money lenders who have listed millions of Kenyans at the CRB over unpaid loans.
The affected loans are those whose repayment period falls within 30 days.
CBK says it has directed the lenders to provide a 50 per cent discount to borrowers who upon payment will have their records updated to perform.
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"Through the Framework, the institutions will provide a discount of at least fifty percent of the non-performance mobile phone digital loans outstanding as at end of October 2022, and update the borrowers' credit standing from non-performing to performing," CBK said.
However, borrowers will be required to pay the remaining amount by May 31, 2023, to have their names completely removed from CRB.
"Upon the expiry of the Framework, the credit standing of the borrowers with respect to these loans will depend on the repayment performance during the six-month period," the CBK said.
The CBK has attributed the huge number of defaulters to the Covid-19 pandemic.
It said that many of the defaulters were affected by the Covid-19 pandemic which saw several lose jobs and had to rely on moneylenders for survival.
The removal of Kenyans from CRB was one of the major campaign promises of President William Ruto.
He had pledged to work on modalities to have the group removed from CRB so that they can access affordable loans.
