Zenka follows CBK order,writes off Sh166m of customers debt

•The initiative will be accompanied with a three day grace period.
•It will benefit borrowers whose loans are non-performing.
Zenka digital is set to clear a total of Sh 166 million in outstanding debt off its books.
The partial write-off of past due interests across its entire loan portfolio will benefit borrowers whose loans are non-performing and whose lives were severely impacted by the adverse effects of the Covid-19 pandemic.
“We routinely and thoroughly analyze prevailing market situations and act proactively and pre-emptively to contribute to the country’s economic recovery by helping our customers regain their financial balance and grow,” Zenka country manager Duncun Motanya said.
This approach is expected to significantly reduce the defaulters’ financial burden, thus facilitating them in taking steps toward regaining their financial balance.
The initiative is the company’s first significant strategic initiative aiming to support its customers, the majority of whom are micro, small and medium enterprises (MSMES).
It will be accompanied by a three-day grace period for borrowers struggling to repay on time.
According to the lender, no interest will be charged during the first three days past the due date.
The grace period will be provided to all its customers with no exemptions or additional costs.
“Meticulous creditworthiness assessment combined with smart financial products and flexible repayment options enabled us to open up new possibilities to millions of Kenyans and motivate them to work harder and think smarter,” Motanya added.
He said the company strives to set and promote proper lending standards, thus reshaping the industry into one that is built on best practices in lending and consumer protection.
It also offers its customers a flexible repayment program, bearing in mind that even the most deliberate customer may face unpredictable difficulties.
However, customers who can’t repay on the due date are encouraged to contact the lender and work out a solution that will satisfy both parties without the need for escalation.
“The highly challenging post-Covid period, resulting in massive loss of employment and closure of micro-enterprises, requires even more flexibility on the lending industry’s side,” he added.
Lenders have now started taking the lead to offer their customers with a suitable and more lenient framework that will enable them have a good record in credit repayment.
This comes at a time when the Kenya Kwanza government is pushing for ways that will enable borrowers to get access to loans with an ample repayment plan that will enable them to build up on their credit eligibility.
President William Ruto during the Mashujaa day celebrations had urged Credit Reference Bureau (CRB) to abandon the black listing of borrowers and move to a credit scoring system that makes them eligible for credit even as they work to improve their creditworthiness.
Last week, the Central Bank of Kenya (CBK) rolled out a credit repair plan that will see close to 4.2 million mobile money borrowers delisted by credit reference agencies.
The apex bank had said lenders would grant a 50 per cent discount to defaulters with outstanding loans as of the end of October 2022 with the framework expiring on May 31, 2023.
The total value is approximately Sh30 billion equivalent to 0.8 per cent of the gross banking sector loan portfolio of Sh3.6 trillion as of the end of last month.
The initiative is part of the post-Covid-19 economic recovery plan and targets borrowers in personal and micro-enterprise sectors.
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