Commercial bank borrowers have extra three months to start servicing loans after the Central Bank of Kenya extended loan restructuring to July 3.
In a statement released Tuesday, the apex bank said the the extension applies to loans which were being serviced by March 2, 2020 but went into arrears afterwards.
“CBK will continue to closely monitor the unwinding of outstanding restructured loans to ensure the continued stability of the banking sector,” the regulator said.
It revealed that at least loans worth Sh1.7 trillion, representing 57 per cent of banks’ total loan book have been restructured since it announced the emergency measure mid March last year to cushion borrowers from vagaries of Covid-19.
Even so, since easing of Covid-19 containment measures, borrowers resumed repayment of loans, pushing outstanding restructured loans to Sh569.3 billion or 19 per cent of gross loan book as at last month.
At least 95 per cent of borrowers are now servicing debt owed.
Tough social economic situation presented by Covid-19 has crushed revenue both for households and businesses, making it difficult for borrowers to service credit facilities.
By December last year, the gross non performing loans was at a high of 14.1 per cent but is likely to break the 15 per cent ceiling as projected by the global credit rating from, Moody’s.
Last week, KCB Group reported a gross NPL for the year ended December 31, 2020 at 14.9 per cent.