Kenyan Banks have so far extended the repayment period for loans amounting to KSh 844.4 Billion or 29 % of the banking sector’s KSh 2.9 Trillion loan book. This is the effects of COVID-19 continues to ravage households and businesses.
This restructuring within Kenyan Banks took place at the end of the period ended 30th June 2020, four months after lenders were directed to renegotiate repayment terms with distressed individual borrowers and businesses. Of this, personal and or household loans amounting to KSh 240 Billion (30% of the gross loans to this sector) have had their repayment period extended.
For other sectors, a total of KSh 604.4 Billion had been restructured mainly to trade (22.9%), real estate (19.5%), transport and communication (16.3%) and manufacturing (14.0%).
Non-performing loans(NPL) increased in the manufacturing, trade and personal sectors, due to a subdued business environment,” said Dr Patrick Njoroge, Governor of the Central Bank of Kenya(CBK). He made these remarks at the end of the Monetary Policy Committee(MPC) meeting held today.
CBK figures show that the level of total non-performing loans (NPLs) to Gross loans stood at 13.1% in June, compared to 13.0% in May 2020.
While the rate cap law has been repealed, CBK has noted a slowdown in uptake of business loans from Kenyan banks due to a slowdown in business occasioned by effects of COVID-19.