Seven Kenyan Banks Restructure Ksh 176 Billion Worth of Loans

At least seven banks have restructured 176 billion shillings of loans following a request from the Central Bank of Kenya that required extension of loan repayment period as the country is hit by the Covid-19 crisis.

The banks took heed to the requests of the CBK and most of their customers and decided to restructure the loans for March.

The seven banks that have restructured their loans are; Kenya Commercial Bank (KCB), Equity Bank, NCBA Bank, Co-operative Bank, Absa Bank Kenya Plc, Standard Chartered Kenya, and Diamond Trust Bank (DTB).

When he appeared before the Senate Ad Hoc Committee on Thursday, May 7, 2020, CBK Governor Dr. Patrick Njoroge said about 6,430 personal accounts with loans worth 9. 85 billion shillings requested for a loan extension by the end of March.

1,841 business accounts with loans worth 81.55 billion shillings also requested for extension of the repayment period during March.

The CBK governor said requests for loan restructuring are expected to rise in the coming days if Covid-19 continues to haunt the economy.

“Requests for extension of personal loans and restructuring of other sectors loans are expected to ramp up in the coming months if the pandemic continues to penetrate,” said Dr. Njoroge.

“In general, the banking sector has started to feel the adverse impact of COVID-19 as a result of a slowdown in most economic sectors,” the CBK Governor added.

According to CBK most of the loans restructured for business accounts were from the following sectors; Tourism which accounted for 31 percent, Real Estate (17.2 percent), Building and Construction (17.0 percent), and Trade (12.4 percent).

Personal loan accounts that were extended represented 1.2 percent of the total household loans worth 811.9 billion shillings as of March 2020.

CBK said the lenders have also joined forces and they are currently working on a plan to help Micro, Small, and Medium Enterprises that have been adversely affected by the Covid-19 crisis.