Banks collectively restructured loans worth Sh1.7 trillion between March 2020 and February 2021 as the economy struggled during the Covid-19 pandemic.
The Kenya Bankers Association Annual Report and Financial Statements for the 2021-2022 financial year indicated that the amount restructured involved 300, 000 loan accounts.
“The loans restructured were mainly from the household, trade, real estate, manufacturing, transport and communication sectors- all of which were gravely affected by the pandemic,” the report said.
“Despite operating in a difficult and volatile environment, the steps taken by banks only reinforced their commitment to delivering Sustainable Development Goals,” the report added.
The report noted that banks are still supporting their customers through credit accommodations and extending financing.
“It is commendable that the industry restructured loans worth Sh1.7 trillion to support customers go through the pandemic,” KBA chair John Gachora said in the report.
Gachora said the re-opening of the economy offered much-needed relief across sectors, providing additional momentum to a fledgling post-Covid-19 recovery.
He, however, said the recovery has continued to be fragile, necessitating sustained efforts towards building better while ensuring inclusive recovery.
KBA is an association of 44 member banks whose total assets are in excess of Sh6 trillion.
As the umbrella body of institutions licensed and regulated by the Central Bank of Kenya, KBA strives to reinforce a reputable and professional banking sector.
“In many ways, 2021 marked the beginning of a possible ‘new normal’ life following the lifting of Covid-19 containment measures imposed during the pandemic in 2020,” Gachora said.
He said 2021, unlike the previous year, experienced significant economic growth on account of the easing of the Covid-19 containment measures.
The report said the resilience of the banking sector has been supported by a conducive policy and regulatory environment.
It said the Central Bank of Kenya has continued to come up with targeted interventions aimed at supporting sectors whether the pandemic.
Banks restructured loans in measures designed to provide relief to borrowers, support the continued operations of businesses, and strengthen the resilience of banks.
The loan restructuring programme began after forbearance was provided by the Central Bank of Kenya.
Like other central banks worldwide, the Central Bank of Kenya introduced a range of easing measures at the start of the coronavirus pandemic to try to contain damage to the economy caused by the crisis.
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