The Central Bank of Kenya (CBK) has announced the expiry of measures on restructuring of loans for bank borrowers, following the lapse of the one-year allotment.
CBK introduced the measures last year in March to cushion customers seeking relief from the effects of the coronavirus.
Among them was restructuring by banks for loans that were performing as at March 2, 2020 and the provision of regulatory flexibility to banks by CBK.
Loan borrowers whose loans were performing before March 3, 2020 but were restructured now have until June 3 (three months) to regularise their loans.
CBK avers that the measures put up were highly affective.
“The measures have provided space to borrowers to ride through the pandemic, mitigate job losses and pivot their business models to the new normal,” CBK said in a statement on Tuesday.
In a year’s time since March 2020, loans totaling to Sh1.7 trillion were restructured. According to CBK- this accounts 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 February amounted to Sh569.3 billion (19 per cent of gross loans).”
CBK added that as stands, over 95 per cent of the loans are being repaid as per the restructuring terms.
Some of the restricting options included the extension of the loan repayment period and waivers on interest or fees.
Banks were to meet the costs related to the extension and restructuring of loans. They were also asked to waive certain charges such as balance inquiry through digital platforms.
But in that same period, Kenyan banks have paid the ultimate price for keeping the economy afloat.