The Central Bank of Kenya (CBK) says borrowers must recommence regular repayments and have up to June 3, 2021, to ensure that they do not default on their loan obligations.
CBK says its March 2, 2020, was the end of the moratorium period of one year for all outstanding loans aimed to provide relief and reassurance to those who were financially impacted due to the pandemic.
This was together with the provision of regulatory flexibility to banks by CBK, “The measures expired on March 2, 2021”.
“The period for determining the performance of all the restructured loans will begin on March 3, 2021. These include the restructured loans that were performing as at March 2, 2020 but went into arrears after that date. Consequently, in accordance with standard procedures, borrowers whose loans were performing before March 2, 2020 but were restructured and subsequently went into arrears, will have three months (up to June 3, 2021) to regularize their loans,” CBK said Tuesday.
During the period, loans amounting to Ksh.1.7 trillion were restructured by the end of February 2021 accounting for 57 per cent of the banking sector’s gross loans.
Following the resumption of repayments and some pay-offs, the outstanding restructured loans as at end February amounted to Ksh.569.3 billion, or 19 per cent of the total gross loans.
“Over 95 per cent of the outstanding restructured loans are being repaid in accordance with the restructured terms,” CBK observes.