NAIROBI, July 15 (Reuters) – Restructured loans by Kenya’s small and medium-sized enterprises increased tenfold in 2020 from the previous year, largely due to the impact of COVID-19, the bank said Thursday central.
The central bank took action last year to help these businesses survive the economic downturn caused by the coronavirus, many of which are at risk of shutting down.
As part of these measures to amortize distressed borrowers, the central bank authorized banks in March 2020 to restructure loans from companies affected by the COVID-19 pandemic.
The central bank said on Thursday that the amount of loans restructured by small and medium-sized enterprises stood at 234.7 billion shillings ($ 2.17 billion) last year, up from 20.6 billion shillings in 2019. .
“In 2020, the restructuring was largely driven by the negative impact of the COVID-19 pandemic and sought to amortize affected borrowers by easing debt service terms,” the central bank’s investigation said.
He said the commerce sector accounted for 74.2% of restructured loans in 2020.
The period during which banks were offering relief to customers ended on March 2 of this year.
The central bank said at the time that the amount of loans with repayment terms changed by lenders stood at 569.3 billion shillings ($ 5.19 billion) at the end of February. of this year.
This represented 19% of total loans, compared to 57% of total restructured loans at the height of the crisis, the bank said.
In October, the government set up a credit guarantee program for small and medium-sized businesses affected by the coronavirus, and said it expected its capital to eventually reach at least 100 billion shillings.
Kenya expects its economy to rebound this year, with the finance ministry forecasting economic growth of 6.6% in 2021 from 0.6% in 2020, when industries like tourism and related services collapsed due to COVID-19 restrictions. ($ 1 = 108,1000 Kenyan shillings) (Reporting by George Obulutsa; editing by Omar Mohammed and Jane Merriman)