Kenya’s commercial banks have restructured loans amounting to Sh679.6 billion of 23.4 percent of May’s total loan book.
According to CBK, the restructuring initiative has seen lenders cushion struggling workers from pre-existing loans based on their payslips strength. This is amid the Covid-19 pandemic that has seen massive layoffs, unpaid leaves, and pay cuts in vital sectors such as tourism, trade, construction, and transportation.
“Total loans that have been restructured are worth Sh679.6 billion and accounted for 23.4 percent of the total banking sector loan book of Sh2.9 trillion. These measures have provided the intended relief to borrowers,” reveals Dr. Njoroge, CBK’s governor.
Household and individual loans made the bulk of the restructured loan with Sh199.1 billion credit being reconsidered by lenders since March. Also, making a list for credit relief is credit card loans and mortgages to ease borrowers’ economic hardships.
Under the loan restructuring and extension policy, CBK allows lenders to offer credit relief for borrowers, individuals, and firms with a three-month repayment grace period. An additional lengthening of loan tenures or interest payments for a period is also available under CBK’s plan.
The restructuring comes amidst the CBK retaining its interest rates for two months in a row.