Doors closing fast on loan defaulters

Loan defaulters in savings and credit co-operative societies (saccos) will soon find it difficult to access credit anywhere.

This is after the Kenya Union of Savings and Credit Co-operatives (Kussco) partnered with credit reference bureaus to list those who do not honour their obligations.

Kuscco Ltd in an ad yesterday, told those with outstanding loans to agree within 30 days on a repayment mode to avoid being listed as defaulters.

Many saccos have enlisted credit reference bureaus with the aim of sharing information to avoid bad debts.

WILL BE LISTED
“This is to notify you that Kuscco Ltd has partnered with credit reference bureaus, consequently non- performing loans (unpaid for 90 days) will be listed as provided in section 18 of the Credit Reference Bureau Regulations 2013,” said the notice.

By the end of last year, some Sh8.9 billion in loans was not being paid as required, which was, however, an improvement from the previous year’s Sh11.7 billion.

“You are hereby notified to clear your outstanding loan or visit our offices within 30 days to agree on the acceptable repayment plan. Failure to comply will lead to your listing as a defaulter,” said the advert.

BURDEN OF PAYMENT

The names of defaulters will remain in the CRB list for five years, which will complicate matters for those who will seek to borrow again.

Saccos have relied on loan guarantors over the years to recover debts, and sometimes defaulters abscond, leaving them with the burden of payment.

The groups will share credit information with banks, making it difficult for defaulters to borrow there as well.