Kenyan commercial banks have restructured loans worth 273.1 billion shillings since March 18, 2020, in an effort to cushion customers against the effects of Covid-19.
According to the Central Bank of Kenya (CBK), the total loans restructured worth 273.1 billion shillings accounted for 9.5 percent of the total banking sector loan book of 2.8 trillion shillings
CBK says the repayment period of personal/household loans amounting to 102.5 billion shillings, or 13.1 percent of the banking sector personal/household gross loans, had been extended by the end of April.
For other sectors, a total of 170.6 billion shillings had been restructured mainly to Trade (43.5 percent), Manufacturing (13.6 percent), Tourism (9.0 percent), and Real Estate (9.8 percent).
CBK maintains that the banking sector has remained stable and resilient, with strong liquidity and capital adequacy
ratios in the face of Covid-19.
The ratio of gross non-performing loans (NPLs) to gross loans stood at 13.1 percent in April, compared to 12.5 percent in March. This was due to increased NPLs in the real estate, trade, and manufacturing sectors following a further slowdown in economic activity in these sectors.
The measures announced by CBK in March waiving charges on the mobile money bank account to electronic wallet transfers has seen the average number and value of bank to e-wallet transactions increase by 488,000 transactions per week, valued at 166 million shillings.
“Banks have continued to operate smoothly across the country throughout the pandemic period, serving customers both from branches and digital channels,” said CBK.
The CBK foreign exchange reserves, which currently stand at USD8,341.5 million (5.02 months of import cover), continue to provide adequate cover and a buffer against short-term shocks in the foreign exchange market.
The lowering of the Cash Reserve Ratio (CRR) in March released KES 35.2 billion to the banking sector and continues to be transmitted through the economy. To date, 82.6 percent of the funds (or KES 29.1 billion) have been channeled to support lending, especially to the tourism, transport and communication, real estate, trade, and agriculture sectors.