Major banks restructure customer loans in the midst of Covid-19
Seven of the largest banks in Kenya restructured loans worth KSh176 billion to cushion customers against the adverse economic conditions caused by the Covid-19 pandemic in the month of April.
This is according to data presented to the National Assembly by the Central Bank of Kenya.
The restructuring of the loans is intended to shield customers from the economic effect of the crisis caused by the global pandemic.
A sum of KSh9.9 billion of the restructured loans relate to personal loans, where their credit facilities were changed in relation to the suspension of interest, principle, change of collateral or extension.
In March, the Central Bank of Kenya loosened restrictions and classifications for borrowers who had performing loans to protect their credit scores and reports.
The CBK indicated that Ksh81.6 billion loans are from the tourism sector, which has been the hardest hit sector since the slowdown of global travel and the restriction of international flights in March 2020.
There will be relief to those who work and own small and micro enterprises as the CBK intends to create a KSh100 billion credit guarantee scheme to support lending to these businesses by covering bank risks.
Standard Chartered and Absa Banks disclosed that they have already restructured loans amounting to a total of KSh16.3 billion to cushion their borrowers during the first two weeks of April.