Kenya Power may report Stima Loan defaulters

Kenya Power is considering listing defaulters of its Stima Loan project with Credit Reference Bureaus (CRBs).

The Finance Act 2016 amended the Banking Act to allow power, water and telecommunications firms to refer defaulters to CRBs.

Kenya Power has signed up for a pilot of the programme, which is meant to connect poor households to the national grid, that will include passing information from stima loan client records to CRBs that could either be positive or negative, depending on the payment history of the customer.

“The one we are thinking about is stima loan because it is a credit facility although we have not started yet,” said Kenya Power Corporate Communications Manager Johnstone Ole Turana.

The power distributor however said uptake of the loans had been low and defaulters were even fewer.

“The cases are not many. Stima loan uptake was about 70,000 and most of them are paying,” said Mr Turana.

No extension

The loan initiative was launched in partnership with the French Development Agency (AFD) to help connect low-income families who cannot afford the connection fees upfront.

Poor customers were given loans at a five per cent administration fee (one-off payment), 20 per cent upfront with the balance payment spread out over a period of 24 months.

Kenya Power clarified listing would not be extended to defaulting customers who were connected under the Last Mile Project.

This is despite the fact that the project requires clients who cannot pay to sign up to the Stima Loan.

Reports indicate close to a million metres have not vended for more than three months, meaning those who had them installed are defaulting on the Stima Loan.