Microfinance lenders push for overhaul of loan default rules

Microfinance lenders in Kenya are pushing for a regulatory overhaul that could redefine how loan defaults are treated, seeking to extend the classification period from 30 days to 90 days. The sector argues the current one-month threshold is too aggressive for its largely low-income customer base, pushing borrowers into early default, inflating non-performing loan ratios, and driving up costs for lenders through higher provisioning and taxation.