The Central Bank of Kenya(CBK) has started the process of delisting over 4.2 million mobile phone digital borrowers from the Credit Reference Bureau (CRB) blacklist.

In a notice dated Monday, November 14, CBK announced the rollout of the Credit Repair Framework aimed at improving the credit scores of mobile phone digital borrowers.

The apex bank also announced that lenders will offer a 50 per cent discount to defaulters with outstanding loans as of October 2022.

“The framework will cover loans with a repayment period of 30 days or less and were offered by these institutions through mobile phones,” CBK said in a statement.

“Through the framework, the institutions will provide a discount of at least 50 per cent of the non-performing digital loans outstanding as at end of October 2022, and update the borrowers credit standing from non-performing to performing.”

The framework also gives loan defaulters six months to clear their loans or enter into repayment plans with their lenders.

“The institution will then enter into a repayment plan with the borrowers for a period of up to May 31, 2023, for the balance of the loan. Upon expiry of the framework, the credit standing of the borrowers with respect to these loans will depend on their repayment performance during the six-month period,” the CBK added.

The 4.2 million Kenyans owe digital lenders Sh30 billion, meaning the 50% discount will see the lenders forego at least Sh15 billion.

“It is anticipated that the Framework will enable over 4.2 million mobile phone digital borrowers, adversely listed with CRBs, to repair their credit standing. The total value is approximately Sh30 billion, equivalent to 0.8 percent of the gross banking sector loan portfolio of Sh.3.6 trillion at the end of October 2022,” added the statement.

Lenders have been directed to contact the borrowers and provide them with further details of the framework.