A total of 72,559 micro, small and medium-sized enterprises(MSME) loan facilities in the banking industry valued at Sh 234.7 billion were restructured in 2020, says the Central Bank of Kenya Survey.
CBK Survey Findings
According to the 2020 Survey Report on MSME Access to Bank Credit, published by the Central Bank of Kenya (CBK), these constituted 0.6 % of total loan accounts and 7.8% of the total value of the gross loan portfolio as at December 2020.
The restructuring was primarily prompted by the adverse impact of the COVID-19 pandemic and sought to cushion affected borrowers by easing debt servicing terms.
Others were the transport and communication sector (8.7 per cent), agriculture sector (6.6 per cent), real estate (5.7 per cent). Other sectors had less than 1.5 per cent each.
In value terms, the real estate sector accounted for 30.9 per cent of restructured loans, followed closely by the trade sector with 29.4 per cent, the transport and communication sector with 12.3 per cent, while the rest of the sectors had less than 10 per cent.
Owing to the generally subdued business environment resulting from the impact of COVID-19, a significant percentage of MSMEs borrowers either closed or significantly scaled down their business operations.
As a result, non-performing loans that could not be restructured had to be written off.
Survey Data collected by the Central Bank of Kenya (CBK) indicates that, as of December 2020, a total of 6,253 loans valued at KSh2.6 billion were written-off, with commercial banks and microfinance banks writing off KSh2.3 billion and KSh0.29 billion, respectively.