Central Bank of Kenya – CBK announced the measures freed more than 35 billion shillings to commercial banks to directly support borrowers facing repayment challenges. Kenyan lenders restructured loans amounting to more than 200 billion shillings according to data from Central Bank of Kenya. The seven biggest banks accounted for the largest loan restructure with 176 billion shillings as at the end of April.
CBK Governor Patrick Njoroge has told the Senate that tourism industry had the most loans terms re-negotiated followed by the real estate.
March 23, 2020, CBK’s Monetary Policy Committee lowered the Central Bank Rate from 7.25 percent to 7.00 and Cash Reserve Ratio (CRR) to 4.25 percent from 5.25 percent as part of policy actions to cushion the financial sector from adverse effects of the Covid-19 pandemic.
CBK announced the measures freed more than 35 billion shillings to commercial banks to directly support borrowers facing repayment challenges.
Thursday, CBK Governor Patrick Njoroge told the Senate Adhoc Committee on Covid-19 that by end of last month, eleven commercial banks and one microfinance bank had been granted approval to access 17.6 billion shillings freed from the reduction in CRR.
CBK says, the remaining 17.4 billion shillings is likely to be exhausted by the end of this month, forcing commercial banks to come up with more innovating liquidity measures.
Njoroge as further told the committee that Kenyan lenders restructured loans amounting to more than 200 billion shillings in the month of April, as the pandemic choked loan repayment plans.
Equity bank, KCB, Co-operative, ABSA and Standard Chartered were the most affected reorganization more than 176 billion shillings in their loan book.
Njoroge says Tourism, Real Estate, Construction and Trade accounted for 31, 17.2, 17.0 and 12.4 percent of all renegotiated loans.
