Kenyan Banks Restructure 46% of Loans Worth Ksh 1.38 Trillion

Kenyan Banks Restructure 46% of Loans Worth Ksh 1.38 Trillion

CBK Governor Patrick njoroge briefing the Head of State on Measures taken to cushion Kenyans

Kenyan banks have restructured 46% of loans equivalent to Ksh 1.38 trillion to provide Covid-19 relief to borrowers the Central Bank said Thursday.

This translates to 46.5 percent of the total banking sector loan book of KSh 2.97 trillion by the end of October. 

The regulator said this was in line with the emergency measures it announced on March 18. 

“These measures have continued to provide the intended relief to Borrowers,” said Dr Patrick Njoroge when the Monetary Policy Committee (MPC) met to assess the outcomes of its policy measures deployed since March to mitigate the adverse economic effects and financial disruptions from the pandemic.

Out of the loans restructured, personal and household loans amounting to Ksh 303.1 billion (36.1 percent of the gross loans to this sector) have had their repayment period extended. 

For other sectors, Ksh 1,076.9 billion had been restructured mainly to trade (18.7 percent), manufacturing (22.7 percent), real estate (14.5 percent), and agriculture (12.8 percent). 

“Of the Ksh 35.2 billion that was released by the lowering of the Cash Reserve Ratio (CRR) in March, Ksh 32.6 billion (92.7 percent) has been used to support lending, especially to the tourism, trade and transport and communication, real estate, manufacturing and agriculture sectors,” said Dr Njoroge.

Moreover, the regulator maintains the banking sector remains stable and resilient, with strong liquidity and capital adequacy ratios.

CBK says the ratio of gross non-performing loans (NPLs) to gross loans remained stable at 13.6 percent in October and August.

The increases in NPLs from transport and communication, energy and water, tourism, restaurant and hotels, and real estate sectors,  were partially offset by repayments and recoveries in the trade, manufacturing, and building and construction sectors.

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