This archive report was first published on 31 July 2020.
On July 31, 2020, the Central Bank of Kenya (CBK) reported that private sector credit growth had slowed to a five-month low due to the Covid-19 pandemic.
According to the CBK, credit to the private sector expanded by 7.61 per cent in the year to June, reaching Sh2.69 trillion. This was the slowest pace since January, when it grew at 7.3 per cent.
The slowdown in credit growth was attributed to the Covid-19 pandemic, which had led to sharp revenue falls, job cuts, and pay reductions. As a result, corporates and individuals were increasingly seeking extensions on their loan repayments due to liquidity challenges.
Official data showed that banks had changed the terms of loans worth Sh844.4 billion by the end of June, equivalent to 29 per cent of the total loan book. Personal and household loans topped the list of debt restructured since March, when the CBK allowed lenders to offer relief to distressed customers after Kenya reported its first Covid-19 case.
