Nairobi — President William Ruto has announced plans to review the current Credit Reference Bureau (CRB) framework that has blacklisted thousands of Kenyans for defaulting on loans, denying them credit.

In his inaugural speech, Ruto said his administration will work with Credit reference bureaus to create a new system of credit score rating that provides borrowers with an opportunity to manage their creditworthiness.

"Our starting point is to shift the CRB framework from its current practice of arbitrary, punitive, and all or nothing blacklisting of borrowers," said Ruto.

According to Ruto, the new framework will eliminate blacklisting and increase access to credit for Kenyans who are grappling with a high cost of living.

It is not clear how lenders will respond to the new credit reporting system, but likely impacts will be on loan pricing and access to loans.

Data from the CRBs showed last year a third of Kenyan loan accounts are negatively listed as defaulted in an economy struggling to create jobs for the growing number of skilled youth who have found themselves in a debt trap.

Ruto's announcement comes days to the end of a year-long suspension of negative listing of defaulters of up to Sh5 million by the administration of former President Uhuru Kenyatta.

The relief period for such defaulters ends on September 30.

Ruto also said his administration shall implement the Hustler Fund, dedicated to the capitalization of micro, small and medium-sized enterprises through chamas, saccos, and cooperatives to make credit available on affordable terms that do not require collateral.

"To implement all these interventions, we shall establish a Ministry of Cooperatives and SME Development mandated to ensure that every small business has secure property rights, access to finance and a supportive regulatory framework," he said.