NCBA Bank Waive Ksh 11 Billion In Defaulted Fuliza, M-Shwari Loans

NCBA Bank will write off Ksh 11.25 billion of loans under its digital platforms in line with the recent banking sector framework aimed at reducing Kenyans from negative credit listing.

According to the NCBA chief finance officer David Abuya, the bank is engaging loan defaulters under Fuliza and M-Shwari to cancel 50 per cent of the amount borrowed.

As such, the borrowers have six months to repay the remaining amount.

“Of the Sh15 billion, M-Shwari and Fuliza combined we are accounting for Sh11 billion of that. The context is important; we are looking as far as back as 10 years against most digital lenders who have existed from the last year

“’We have already instituted this change. We have already completed the reclassification of more than five million M-Shwari and Fuliza customers. The communications to each individual began going out on Wednesday,” Abuya said.

About 4.2 million digital borrowers negatively listed with CRBs will be delisted and issued with a credit score if they repay the balance by May 31, 2023.

“Our plans are well advanced and effective December 1, all recent customers will be getting a discount of at least 50 per cent. We will also be considering enhancing that discount for customers who would be able to pay back sooner,” Abuya added.

WoK had earlier reported that the Central Bank of Kenya (CBK) has announced plans to restructure credit standing of loan defaulters listed by CRB.

On Monday, November 14, CBK announced a new framework dubbed Credit Repair Framework in favor of mobile phone digital borrowers.

The new program was made possible by financial institutions that offer digital loans such as commercial banks, micro-finance banks and mortgage finance companies.

“Through the Framework, the institutions will provide a discount of at least fifty percent of the non-performing mobile phone digital loans outstanding as at end October 2022, and update the borrowers credit standing from non-performing to performing

“The institution will then enter into a repayment plan with the borrowers for a period 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,” read the notice.

The framework will cover loans with a repayment period of 30 days or less and were offered by these institutions through mobile phones.