Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


Kenya's central bank provides 50% discount to digital defaulters

Article Image
The Central Bank of Kenya (CBK) has implemented a Credit Repair Framework to encourage mobile phone digital defaulters to repay and repair their credit standing.

Under the framework, at least 4.2 million Kenyans who failed to pay 30 billion Kenyan Shillings ($246 million) they borrowed from banks, microfinance and mortgage finance companies digitally will be handed relief and offered a 50% discount.

The banks are now required to have a new repayment plan for borrowers with non-performing accounts that have been reported to credit reference bureaus (CRBs). Digital lenders are forgoing at least KES15 billion ($123 million) in borrowers' debts.

In a statement, the CBK cited that most borrowers were citizens and small businesses that were heavily impacted by the COVID-19 pandemic, and who couldn't repay their debts because they lost their jobs and businesses.

"The adverse effects of the pandemic continue to linger for the covered borrowers. Accordingly, the framework is expected to enable this segment of borrowers to access credit and other financial services as they rebuild their lives and livelihoods," the CBK continued.

Lending relief

The Credit Repair Framework comes at a time when the Kenyan government, along with digital lenders, agreed to develop a new credit score system as opposed to blacklisting customers.

In September, Kenyan President William Ruto announced that over 4 million defaulters on Safaricom's Fuliza overdraft product would be removed from the Credit Reference Bureau (CRB) and other blacklists from November this year.

The Kenyan government, through the CBK, is on a mission to clean up the digital lending industry to get rid of illegal operators.

In October, the country's Office of the Data Protection Commission (ODPC) said it would audit at least 40 digital lenders for data breaches against their customers.

Want to know more about mobile financial services in Africa? Check out our dedicated Fintech content channel here on Connecting Africa.

That came after, the CBK in September licensed only 10 digital lenders from a pool of 288 applicants who had applied for licenses in March.

The East African country has been at the forefront of providing digital financial services for over a decade. Before 2021, many digital lenders operated in the country without licenses and regulations, which increased unethical practices.

The CBK then began requiring all digital lenders to register for new licenses. Those that didn't meet the application requirements were barred from the industry.

Related posts:

*Top image source: Image by wirestock on Freepik.

— Matshepo Sehloho, Associate Editor, Connecting Africa

Innovation hub

New develoPPP Ventures funding program for SA startups

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) has launched develoPPP Ventures, a new funding scheme offering up to €100,000 (US$106,950) for successful startups in South Africa.


Huawei using SA data centers to extend AI cloud adoption

Chinese multinational Huawei is using its three data centers in South Africa to extend artificial intelligence (AI) cloud adoption in the country.

More Innovation hub

Latest video

More videos

Partner perspectives

All Partner Perspectives

Sponsored video

More videos

Follow us on X

Industry announcements

More Industry announcements

Upcoming events

Cyber Revolution Summit
August 9, 2024
Gaborone, Botswana
Africa Tech Festival 2024
November 11-14, 2024
Cape Town, South Africa
More Upcoming events

Africa Tech Perspectives


Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.


The 100 most influential African leaders in 2023

A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Africa Tech perspectives

Guest Perspectives


Omdia View: May 2024

By Omdia Analysts

May 2024's telecoms highlights in the Middle East and Africa included African 5G subscriptions surpassing 5 million, growth from SpaceX's satellite Internet service Starlink, and a major fiber partnership in the Middle East and North Africa.


How e-mobility could transform Africa's transport sector

By Francis Hook

ICT analyst Francis Hook delves into Africa's e-mobility sector and unpacks the challenges faced locally and the benefits the move to electric vehicles could bring to urban transport systems.

More Guest Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up
Tag id test-002